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Minimum Wage Law Won’t Lead To Increased Salaries

Parliament on Tuesday passed the Minimum Wage Bill, 2015 into law.
The private members’ Bill passed by Parliament seeks to provide for the determination of a minimum wage based on the different sectors of the economy.

The Bill become law after the President has assented to it. Should the President, who has previously complained that such a law in place would scare away investors, refuse to sign it, the Bill will revert to Parliament for further scrutiny.

 During a press briefing after passing the law at Parliament, Workers MP, Arinaitwe Rwakajara , who tabled the bill on 24th  December 2015 said that although the law will improve the welfare of workers, this won’t translate into higher salaries.

“This law will improve the welfare of workers and bring harmony between employers and employees and empower the population to increase on their purchasing power. This law doesn’t mean there will be higher salaries,” said Rwakajara.

He also emphasised that the legislation is no threat to the investors and the basic pay will be reached at by a tripartite arrangement comprising government representatives, workers representatives and employers unions.

If passed into law, employers who fail to comply with the provisions of the Minimum Wage are likely to face a three year jail term upon conviction or pay Shs10m.

Section 15 (2) of the legislation stipulates the punishment; If an employer pays an employee to whom a wages regulation order applies remuneration less than the statutory minimum remuneration, or fails to observe any of the conditions of employment prescribed in the order, he or she commits an offence and is liable on conviction to a fine not exceeding five hundred currency points for each offence or imprisonment for a term not exceeding three years or both.

When asked why Parliament didn’t come up with a specific figure on minimum wage, Arinaitwe explained: “It would be dangerous if a legislator stands in Parliament and fixes minimum wage. It is important someone takes study such that they reach compromise of certain figure that doesn’t hurt anybody. It wouldn’t be realistic; you may find sector hurt because you didn’t do research.”

The Bill provides that the Gender, Labour and Social Development minister will appoint a minimum wage board to fix a minimum wage.

While tabling the bill in 2015,  Rwakajara said: “In order to curb the exploitation of workers and employees in the private sector, there is need to have a comprehensive and updated legislation setting out the mechanism for the establishment of a minimum Wage and conditions of employment which take into account the uniqueness of the each sector of the Economy, a mechanism that which allows employers and employees to be represented and heard during the process leading to the establishment of Minimum Wages as well as prescribing heavy penalties for non compliance.” Rwakajara said at the time.

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