Government changes tune on minimum wage
Ministry of Labour, Sports, Youth, and Manpower Development has said the minimum wage per day that employers should adhere to is K962.
This is contrary to the K1,250 which Minister of Finance Goodall Gondwe announced during the 2017/2018 budget meeting.
Minister of Labour, Francis Kasaila, told Parliament Thursday that the monthly minimum wage that government agreed with labour institutions such as Employers Consultative Association of Malawi (Ecama) and Malawi Congress of Trade Union (MCTU) is K25,000 an upward adjustment from K19,000
“You may wish to know that the daily minimum wage is calculated by dividing the minimum wage by the maximum number of working days, in this case 26. If we multiply accordingly, the daily minimum wage translates into K962 per day,” he said
He said K1,250 which Gondwe announced in the chamber was a mistake.
He was responding to Member of Parliament for Dowa East, Richard Chimwendo Banda, who queried why the ministry is implementing a minimum wage of K962 instead of the K1,250 which the Ministry of Finance, Economic Planning and Development pegged.
Kasaila further said this is the case considering the change in the tax-free bracket that the Finance Ministry also made after raising the wage.
“The minister announced that the increase in the tax free bracket from K20,000 to K30,000 will be done to ensure that those who earn a minimum wage should be below the threshold. The minimum wage of K1,250 per day would translate to a monthly minimum wage of K32,500 which could be above the threshold,” he said
Chimwendo Banda further asked when government will implement the sectoral minimum wage just like in Zimbabwe and South Africa.
In his response, Kasaila said the matter is being addressed among the three labour institutions.
“We are working on fixing minimum wage by sector. The consultations that have been held so far have resulted in agreement of total number of sectors. What is remaining is coming to enabling subsidiary legislation,” he said
He, however, said there is need to tread carefully as the approach has also been abandoned in South Africa, hence the need to study and analyse carefully its effectiveness.
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