Employers Unhappy Over Government’s Decision to Raise Minimum Wage

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Employers Unhappy Over Government’s Decision to Raise Minimum Wage

May 6: Private sector employers have expressed dissatisfaction over the government's decision to raise the minimum salary of workers to be implemented from the start of the upcoming fiscal year.

Employers are dissatisfied that the government has taken a unilateral decision amidst this crisis when employers are concerned about sustaining business and providing salary to the current employees.

The Ministry of Labour, Employment and Social Security had issued a notice on Nepal Gazette on May 4, fixing the minimum wage. Since then, umbrella organization of employees and employers have come forward with various views.

The Labor Act requires the minimum wage be fixed on a monthly, daily and hourly basis in every two years. In the Fiscal Year 2018/19, the minimum salary was raised to Rs 13,450 but in the Fiscal Year 2019/20 and the current fiscal year, the minimum wage was not increased. 

According to the Nepal Gazette, the increased salary will be implemented from mid-July of Fiscal Year 2021/22. As soon as this notice was published, the private sector expressed dissatisfaction. The umbrella organization of the private sector has engaged in discussions to publish their formal statement.

 Shekhar Golchha, president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said that the government's decision has disappointed them. No discussions have been held with the FNCCI though it is the primary organization concerned with the decision. 

He said that the focus should be on how to secure current employment rather than on increasing minimum wages. "It may be reasonable according to the Act, but this is not the right time to raise the minimum wage, since we are in the middle of a global crisis," Golchha said.

Rajesh Agrawal, vice president of the Confederation of Nepalese Industries (CNI) said it is not possible to implement the new wages. He said that it is not certain how long the prohibitory orders will be enforced so the announcement of increasing wages has disappointed them during this difficult time. 

Binod Kumar Shrestha, president of the General Federation of Nepalese Trade Union (GEFONT) said the new increased salary must be implemented from mid-July. He stressed on the need to implement the provision rather than debating whether it is the right time to raise the wages. He added that the increased salary is still low considering the current rate of inflation. Employers have been receiving various tax waivers from the government due to the impact of COVID-19. 

Despite the COVID-19 pandemic, most of the industries are performing well so they can't deny to provide the increased salary.

"Instead of every two years, salary has been raised in three years so it is not right to express dissatisfaction over the decision. It is not reasonable to say they will not be able to provide the salary on the pretext of COVID-19 pandemic,” said Shrestha.

Amidst the COVID-19 pandemic, most of the industries are doing well while many of them like five-star hotels are struggling. Employees of those hotels are still working for a meager salary of Rs 3000 to Rs 5000 per month, said Shrestha. The raised salary of Rs 15,000 includes basic salary and inflation allowance.

Meanwhile, the daily wage of a worker has been increased to Rs 577 while the hourly wage has been increased to Rs 77 from Rs 48.


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