Government sets Shs130,000 minimum wage

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Kampala. A government-appointed committee assigned to determine the viability of setting up a national minimum wage has recommended Shs136,000 per month as the lowest pay to any worker, including house maids employed in the country.
According to a leaked report to Cabinet, a copy of which Daily Monitor has seen, the Minimum Wages Advisory Board set up in 2015 has recommended creation of “an affordable National Minimum Wage for Uganda”, which the board deems “is likely to solve some but not all the economic challenges” the country is facing.
If approved by Cabinet and passed by Parliament, the policy will imply that the Shs136,000 will be the lowest amount that employers in Uganda can legally pay their workers per month regardless of whether the worker is a professional, skilled or unskilled.

“…the extent of the informal/uncovered sector, weak enforcement mechanism and the prevailing wage rates” were some of the reasons advanced by the board chaired by former Permanent Secretary in the Ministry of Finance and Secretary to the Treasury, Mr Chris Manyindo Kassami, before his death in March last year.
Other members on the board included Mr Chris Kanya, a government representative and alternate chair, Mr Milton Turyasiima, a member representing government, Ms Juliet Nazziwa Musoke representing employers, Mr Fred Robert Wapakhabulo Namawa (employers), Mr Joram Bruno Pajobo (workers) and Ms Dinah Kusasira (workers). The team was assisted by a secretariat led by Mr Patrick Okello.

Mr Kassami’s death, the 2016 general elections and logistical challenges, including financing, were some of the constraints that delayed conclusion of the board’s work.
It is not clear when and if the minimum wage will be approved but government had committed to have it in force by July 2015.
President Museveni has previously made known his views against the minimum wage, which he has argued will stifle investment.
“The MPs and trade unions should attract investors and not chase them away. Workers MPs should help me attract factories and stop those slogans of minimum wage…,” President Museveni said in 2005.

Neighbouring countries. Neighbouring Kenya and several other African countries have a minimum wage in place. In countries with minimum wage, employers pay different rates, some more or below the minimum wage, although paying below remains illegal.
Earlier laws. It is, however, close to impossible to pay below Uganda’s current minimum wage of Sh6,000 per month last set in 1984 during President Obote II government, which has remained in force to-date.
The Shs75,000 per month recommended by the Minimum Wage Advisory Council in 1995 for unskilled workers was never implemented.
Earlier attempts. In 2013, Parliament granted leave to MP Arinaitwe Rwakajara to draft a Private Member’s Bill on the minimum wage. In his Bill, Mr Rwakajara made a raft of proposals, including setting the minimum wage at Shs250,000 per month, which trade unionists at the time argued would protect workers from exploitation.

He proposed a Shs10m fine against a defiant employer and other hefty compensation fees to the affected workers.
The Rwakajara Bill also proposed creation of a Minimum Wage Board, which would have representatives from different sectors, including employers, workers, ministries of Finance and that of Labour and specialised government institutions such as the National Planning Authority.
Daily Monitor contacted Mr Rwakajara, but he said he was still in Parliament and promised to get back. By press time, he had not.

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