Minimum Wage Bill: Welcome move for Ugandan workers

Last month Parliament, after several years of contemplation, finally passed the Minimum Wage Bill. In 2017, a government-appointed committee assigned to determine the viability of setting up a national minimum wage recommended approximately Shs130,000 per month as the lowest pay to any worker, including housemaids in full time employment.

Although it will take several weeks before the Bill comes into effect, for many Ugandans, it has already taken far too long since the last minimum wage came into effect in 1984. The implementation of the Bill will be channelled through the Ministry of Gender, Labour and Social Development.

In 2015, through a Private Members Bill by Workers MP Arinaitwe Rwakajara, the Bill was introduced, although not much transpired thereafter.
For many years, it was believed that since unemployment rates were very high in many Third World countries, their governments attracted investors by allowing them to pay whatever they deemed fit to their employees.

Furthermore, it was also believed that minimum wage in Uganda would increase the cost of doing business, thereby reducing the levels of foreign investments.

The trend has finally started changing with many African leaders realising that although the national minimum wage for developed countries is designed as an incentive for people to start looking for work – thereby boosting the economy’s labour supply – this should not necessarily deter poor countries from wishing to improve the lives of the few employed people.

Since 2016, several African countries, including South Africa, have successfully implemented a minimum wage for workers. In the East African Community, Kenya recently not only implemented but also increased the minimum wage for her citizens.

In most countries, the minimum wage, also known as the lowest acceptable amount of money paid to a worker either per hour or per month, is normally put in place after extensive consideration of several factors, including the consumer price index, increasing cost of living, working families’ needs, workers’ skill levels, quality, quantity of production and general levels of wages in other sectors in the country.

In the United Kingdom (UK), the National Minimum Wage (NMW) was introduced in 1999 after lengthy debates in the House of Commons. The aim of NMW was combating poverty, improving the living standards of people, especially the most vulnerable groups including low paid female workers or youth workers in sectors such as retail, hairdressing, cleaning, hospitality and child care.

The Low Pay Commission (LPC) was established under the National Minimum Act, 1998, as a statutory body that manages NMW as a body advising government on adjustments for workers in specific age brackets and skill sectors.

In the UK, Her Majesty’s Revenue and Customs enforces that the NMW and ensures employers compliance through regular inspections and investigations.

In Uganda, employers who fail to pay a minimum wage will be deemed to have committed an offence and liable, if convicted, to a fine not exceeding Shs10m for each offence or imprisonment for a term not exceeding three years, or both.

Since 1984, when the last minimum wage payment was set at Shs6,000, compliance in some cases still remained lacking.
Although government may mean well, implementation of the minimum wage and compliance will be frustrating because of corruption and ignorance of the law, rendering the minimum wage ineffective.

Ms Victoria Nyeko is a media commentator.
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Twitter:@VictoriaNyeko