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New minimum wage starts January 1

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Employers should get ready to part ways with more money as, from January 1 next year, they will be expected to start paying workers a minimum wage of K50,000 after Labour Minister Ken Kandodo formally signed for the gazetting of the amended Employment Act, his deputy Vera Kamtukule has disclosed.

However, the development has rattled the Tea Association of Malawi, which yesterday met with ministry officials and presented their case. They cited, among other grounds for seeking the ministry’s indulgence, the emergence of the novel coronavirus, saying between 40,000 and 50,000 people who depend on the sector have had their lives disrupted.

But, in an interview with The Daily Times, Kamtukule—while confirming meeting representatives of the tea industry—said the government’s position was that the adjustment would cut across all sectors.

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She, however, said the only exception were domestic workers who would have their minimum wage increased by K3,000 to K38,000 per month.

In January this year, the Ministry of Labour increased the minimum wage from K25,000 to K35,000 and, later in June, further increased the ceiling from K35,000 to K45,000.

However, Parliament did not approve the second increment as the actor, Democratic Progressive Party, that championed the cause was booted out of government on June 23 this year.

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The Tonse Alliance-led administration, in October, proposed an adjustment to the minimum wage from K35,000 to K50,000, a move that employers resisted.

For instance, Employers Consultative Association of Malawi (Ecam) preferred a sectorial adjustment to the government supposition, and pegged the minimum wage for domestic workers at K38, 000.

“We fought so hard with Employers Association [of Malawi], who are resisting it. The gazette notice was signed and [the] effective date is January 1 2020.

“However, [as for] other workers like domestic ones, employers were arguing and threatening [that] they will lay them off,” she said.

She said 89 percent of the labour force is in the informal sector while the formal labour force takes up only 11 percent.

“What this means is that these are unbanked and most likely do not pay taxes as well. We are done with our tasks. My minister signed the revised document after [Ministry of] Justice [officials] had put it into legal language. It is now [up to the Ministry of] Justice to send it to Government Print but we are hopeful it will be done by 30th December so that we meet the 1st January effective date,” she said.

Tea Association of Malawi Chief Executive Officer Beyani Munthali confirmed to have met with Labour ministry officials where they discussed challenges affecting the sector.

“Yes, we met the Ministry of Labour. The discussions were centred on government’s views on job creation, which the industry feels is important, challenges with respect to bogus workers’ compensation claims in the tea industry and updates to the ministry on prices of tea on the global market, compounded by the impact of Covid-19,” he said.

Meanwhile, Ecam Administrator George Khaki has said his association was not updated on the latest development.

“We asked for some exceptions concerning the raise. For example, industries that have been hit hard by Covid-19; we asked that they be exempted from the K50,000 minimum wage [requirement]. We also asked that SMEs [small and medium enterprises] not be included as the wage would be too much,” he said.

He expressed fear that, if the minimum wage would, indeed, be increased, wholesale prices of commodities would be raised.

“Overtime, we will also see a lot of informality because most of the people are operating in the informal sector. Last, but not least, it will affect creation of decent jobs because people would rather operate outside the law and give poor conditions and poor jobs to people.

“But, for other sectors, yes we agree to the development but with those exceptions. We cannot comment [on the issue of] domestic workers because they are not part of Ecam,” he said.

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