By Duncan Mlanjira
The Ministry of Labour has announced that the increase of the minimum wage from K962.00 per day to K1,346.16 per day shall be effected from January 1, 2020.
A statement from the Ministry says the revision has been formalized through Government Gazette Notice No. 68 headed ‘Employment ACT (CAP. 55:01) (Amendment) Order 2019.
Minister of Finance Mwanamveka
The minimum wage increase was announced in July when Minister of Finance, Joseph Mwanamvekha presented the 2019/20 National Budget in Parliament.
There is no separate legislation on minimum wages in Malawi. It is one of the provision under Employment Act, 2002 regulated by articles 54 & 55.
Legal minimum wages in Malawi do not vary by region but are declared at the national level for two sectors — urban and rural declared on daily basis.
Normal working hours for an employee is 48 hours a week comprising of six consecutive work days (Article 36 of Employment Act).
Parliament sitting
According to article 54 (1) of the Employment Act, 2002 the Ministry of Labour shall fix minimum wages for any group of wage earners, in consultation with organization of workers and employers relevant to the group of wage earners such as Employers Association of Malawi and Malawi Congress of Trade Unions.
According to article 54 (1), (4) & (5) fixation, revision or even modification of any procedure for setting minimum wages, shall be done by Ministry in consultation with the representatives of workers and employers and reconsider the level of minimum wages, at least, once in every three years.
In prescribing minimum wages, as according to article 54 (4) of Employment Act, 2002, the Minister, as far as possible, considers:
a) the needs of workers and their families, the general level of wages, the cost of living, social security benefits and the relative living standards of other social groups and;
b) economic factors, including the requirements of economic development, levels of productivity and any effect the wage might have on employment.
Article 55 (2) of Employment Act, 2002 stresses that any employer who pays wages less than statutory minimum wage shall be guilty of an offence and liable to a fine of K50,000 and to imprisonment for 10 years.
Article 64 (2) of the Employment Act, 2002 says any person alleging the violation of a provision of this Act may file a complaint with the District Labour Officer.
As per article 64 (4), trade unions can also represent a person having dispute or alleging violation of a provision of this Act. As per article 64 (3) of the Employment Act, 2002 person can also present complaint to the Court.
During the July Parliament sitting, Mwanamveka had announced that Government was going to spend K1.7 trillion in the next financial year, an increase of 20.1% from the 2018/19 preliminary outcome of K1.4 trillion.
Out of the total planned expenditure, K1.3 trillion, which is 20.6 percent of GDP, accounts for recurrent expenditure while K437.9 billion (representing 7.0% of GDP) is provided for the development budget.
At 7 percent of GDP, development expenditure in the 2019/20 Budget is the highest in recent years, as in the 2018/19 Budget, development spending was revised to 5.7% of GDP while in the previous financial year of 2017/18, it was recorded at 4.6% of the country’s total wealth as measured but GDP.