We Made a Mistake; Hourly Pay Should Be the Minimum Wage, Says Fashola

According to former Works and Housing Minister Babatunde Fashola, the National Assembly may have violated the Constitution by conflating pay and wage.
He clarified that the National Assembly’s legislative authority only extends to hourly wages; it does not extend to monthly salaries.

The former governor made this argument on Arise News on Tuesday, saying that changes to raise the minimum wage do not always result in significant distortions to the entire salary compensation structure in other countries where it is applicable.

He stated, “The National Minimum Wage Act 2019, which went into effect on April 18, 2019, is the current minimum wage legislation. Section 3 (4) of that Act states that the national minimum wage expires after five years and is subject to review in accordance with its provisions.

“Please take note that the Act has not expired—only the’minimum wage’ has. As stated in the highlighted section above, the review of the 2019 minimum wage provisions will align with the Act’s provisions after a five-year period.”

After that, Fashola said, “Therefore, it seems obvious from this definition that the NASS may have acted unconstitutionally by legislating on a SALARY (monthly payment) when they only have power to legislate on WAGES, an hourly payment, by making a law in Section 3(1) of the Minimum Wage Act that the minimum wage of N30,000 shall be paid monthly.
Section 3(4) of the Act stipulates that the minimum pay “shall be reviewed in line with the provisions of this Act,” which includes Section 3(1), which prescribes a monthly sum rather than an hourly salary. This makes the discussion of the minimum wage in 2024 crucial.

The minimum wage for Nigeria will be N173.07 per hour if we apply the global method of computing wages, which divides the gross annual sum by 52 weeks and then by the recommended 40 hours per week. This is because the proper definition of wages as an hourly rate is N30,000 per month, not N30,000 X 12 (months) = N36,000 divided by 52 (weeks) = N6,923.07 divided by 40 (hours).
He went on to say that employers who pay the minimum wage can also maximize their workers’ productivity by limiting the number of hours they work.

Employers who are compelled to pay the minimum wage may also modify their revenue streams by restricting the number of hours that workers put in and maximizing productivity, with workers making up the difference by working extra hours elsewhere.

“We’ve made the mistake of fixing monthly minimum salaries as wages and then adjusting for all other salary earners,” he continued. “This has led to an excessive compensation wage that employees find hard to meet.”

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