Minimum Wage Soars: Workers Get Up to Rs 600 – 3,248 More

On Friday, August 9, during a press conference focused on wage adjustments for both the public and private sectors, Minister Soodesh Callichurn elaborated on the methodology behind the recent salary review for employees within the private sector.

Minister Callichurn began by discussing the historical progression of the lowest wage in the economy, highlighting the case of a factory worker.

In 2015, these workers earned a salary of Rs 4,971, which increased to Rs 5,220 in 2016 and then to Rs 5,420 in 2017.

He explained that the minimum wage was revised following the establishment of the National Wage Consultative Council (NWCC) and that significant groundwork has been laid since 2018.

In 2020, a further revision raised the minimum wage to Rs 9,000. Recently, in January 2024, the minimum wage saw a substantial increase to Rs 16,500, incorporating an additional compensation for salary adjustments.

“This represents a significant increase of Rs 4,925 within just a few months,” he noted.

Addressing the issue of rising living costs, Minister Callichurn described it as a global phenomenon due to inflation affecting economies worldwide.

He reiterated that the government is contemplating a comprehensive wage reform and has approved the establishment of a committee dedicated to this purpose.

Focusing on the salary adjustment exercise for the private sector, which spans various economic sectors, Minister Callichurn mentioned that the NWCC has been engaged in this effort for the past two years.

He noted that the complexity arises from the range of job grades among employees. He acknowledged that the latest revision, which set the minimum wage at Rs 16,500, has led to salary discrepancies among workers who were earning lower wages.

For instance, he pointed out that a foreman may currently earn the same salary as a laborer or a helper, resulting in misalignment of pay scales relative to employees’ responsibilities.

To address this, the government has decided that all private sector employees, regardless of whether they fall under the Remuneration Orders and earning up to Rs 50,000, will receive an adjustment relative to their base salary.

It is important to note that most private sector workers are covered by 31 Remuneration Orders, all of which will be modified in the near future.

The methodology for calculating wage relativity takes into account both those covered by Remuneration Orders and those who are not.

To determine this, the base salary from January 2024 is compared to the base salary from December 2023.

As an example, a salesperson whose base salary was Rs 12,175 in December 2023 and increased to Rs 16,500 in January 2024 will see an increase of Rs 600. Similarly, a waiter with a base salary of Rs 13,338 in December 2023 will benefit from an increase of Rs 3,124, while a welder whose salary increased from Rs 14,699 in December to Rs 18,444 in January will see an additional Rs 3,248.

Private sector jobs requiring a diploma must now offer a minimum salary of Rs 23,000, while positions that require a degree must provide a minimum salary of Rs 25,000.

This announcement was made by Finance Minister Renganaden Padayachy at a press conference held on Friday, August 9.

Source: Defi Media / Defi Media2