The Federal Government of Nigeria has issued a firm warning to private sector recruitment agencies, emphasizing the need to adhere to the newly established N70,000 minimum wage.
The government stressed that failure to comply with this mandate would not be tolerated, underscoring that the new wage structure is essential to address the harsh economic realities faced by workers in Nigeria.
Speaking at the 13th Annual General Meeting of the Employers Association for Private Employment Agencies of Nigeria in Ikeja, Lagos, the Permanent Secretary of the Federal Ministry of Labour and Employment, Alhaji Ismaila Abubakar, reiterated that the N70,000 minimum wage applies to both government and private sector employees.
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Represented by the Director of Employment and Wages, John Nyamali, Abubakar clarified that paying workers less than the minimum wage constitutes a crime punishable by law.
According to Abubakar, “The minimum wage is now a law, and as a result, it is a punishable crime for any employer to pay less than N70,000 to any of its workers.”
He added that the private employment agencies should ensure that the new wage floor is included in any employment contract they secure. Abubakar was clear that after all deductions, no worker should receive less than N70,000 as take-home pay, warning that non-compliance could result in severe legal penalties.
The Federal Government’s commitment to enforcing the new wage structure comes amid growing concerns over the rising cost of living in Nigeria, spurred by high inflation and the removal of fuel subsidies earlier this year. President Bola Tinubu had promised to implement the wage increase by May 1, aiming to alleviate the financial burden on the country’s workforce.
Concerns and Ambiguities
While the Federal Government’s intentions are clear, certain ambiguities surrounding the implementation of the new minimum wage persist. The President of the Employers Association for Private Employment Agencies of Nigeria, Dr. Olufemi Ogunlowo, has called for clarification on whether the N70,000 wage is based on net or gross income, urging the government and the Nigeria Labour Congress (NLC) to resolve this uncertainty. Ogunlowo’s remarks highlight the need for a more comprehensive explanation of the wage laws, as employers seek clarity to ensure compliance.
Government officials have yet to provide a definitive answer on whether the wage is calculated before or after deductions such as taxes and pension contributions. This lack of clarity is believed to have led some employers to delay full implementation as they wait for more detailed guidelines.
The Troubling Unemployment Reality on the Ground
While the government pushes for strict adherence to the N70,000 minimum wage, the reality on the ground paints a more complex picture. With median incomes in Nigeria reportedly hovering around N300,000 per year (below N30,000 per month), many workers earn far less than the newly prescribed minimum. The government’s push to punish employers who fall short of this target has raised eyebrows, with critics describing the move as “draconian”—especially as the government itself has yet to fully implement the new wage.
As of now, only a handful of states have committed to paying the N70,000 minimum wage, with many still grappling with funding challenges. For most Nigerian workers, particularly those in the informal sector surviving on low salaries, the wage increase remains a distant promise in a rapidly deteriorating economy.
Potential Implications for the Nigerian Labor Market
While the intent behind the new minimum wage is to support workers, there are growing concerns about its potential to further disrupt Nigeria’s already fragile employment market. With the unemployment rate exceeding 33%, many argue that forcing private employers to meet the wage increase could inadvertently lead to layoffs, particularly in the informal sector, where many businesses operate on thin profit margins.
Employers in industries such as retail, hospitality, and manufacturing have expressed worries that the new wage law if enforced without proper economic adjustments, could push businesses to cut their workforce to remain viable.
The International Labor Organization (ILO) has previously warned that wage policies not carefully tailored to the realities of developing economies could backfire, resulting in higher unemployment rates and increased poverty levels.
Against this backdrop, labor experts argue that the government must balance wage enforcement with support mechanisms that encourage business growth. They note that the risk of over-regulating an already strained private sector could hinder job creation and further aggravate the unemployment crisis.