Set Shs100,000 as minimum wage, employers tell government

Thursday March 14 2019

Reasonable rate. According to Federation of

Reasonable rate. According to Federation of Uganda Employers, the minimum wage should be set at a rate that will not squeeze out small enterprises. PHOTO BY EDGAR R BATTE  

By Christine Kasemiire

Kampala. The Federation of Uganda Employers (FUE) wants Shs100,000 set as the minimum wage across all sectors.
Speaking on the sidelines of the launch of the Employer of the Year 2019 survey (EYA) yesterday, Mr Douglas Opio, the FUE executive director, said regular salary surveys indicate that employers are open to having a minimum wage.
“Across the board, [in a survey conducted did in 2016] it was established that employers want Shs100,000 as the minimum wage,” he said without explaining the basis on which the figure was reached.

Through consultations with employers in the construction sector, based on current wage levels paid to workers, FUE established a minimum wage of Shs160,000.
While employers are willing to embrace the minimum wage, Mr Opio said, they are also conscious of the ability of the employer to pay.
For instance, if the minimum wage is set at a high threshold, the employer will not be able to comply, which he said could culminate into higher unemployment levels.

Mr Silver Mugisha, the National Water and Sewerage Corporation managing director, said there is need for a balance between the capacity of employers to pay workers and an upgrade in skills delivered by the employees.
“You cannot have minimum wage and then the staff costs are 90 per cent of the operation and maintenance costs, the only thing you would be doing is working for employees,” he said.

The discussion comes at a time when the Minimum Wage Bill, passed by Parliament on February 20, is awaiting presidential assent.
The Bill provides that the Gender, Labour and Social Development minister will appoint a minimum wage board to fix a minimum wage.
Should the President, who has previously complained that such a law would scare investors, refuse to sign it, the Bill will be sent back to Parliament for review.
However, President Museveni in a tweet posted on March 9, said progress was being made in the Minimum Wage bill but asked that the matter be settled scientifically and not emotionally.

The warning
Employers warn that businesses operating in the informal space, which are the most predominant in Uganda, will be the losers if the minimum wage is set.
FUE argues that multinational players such as Total, Tullow and MTN will not suffer as a result of setting the minimum wage in comparison to the strain that will be enforced on local enterprises and startups.

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