Former Minister of Works and Housing, Babatunde Fashola, has expressed concerns that the National Assembly (NASS) may have overstepped its constitutional authority by legislating on salaries instead of wages. Speaking at the Covenant Nation’s The Platform event on June 12, Fashola highlighted a potential constitutional misstep in the National Minimum Wage Act 2019.
Fashola pointed out that while the Act mandates a minimum monthly wage of N30,000, the term “wage” traditionally refers to hourly compensation. According to Fashola, the NASS might have conflated the terms salary (monthly payment) and wage (hourly payment), which could render their legislative actions unconstitutional. The National Minimum Wage Act 2019, effective from April 18, 2019, mandates a review of the minimum wage every five years. Fashola stressed the importance of adhering to the definition of wage as an hourly rate. By mandating a monthly minimum wage, the NASS may have acted beyond its constitutional remit.
Fashola calculated that if the N30,000 minimum wage were correctly defined as an hourly rate, it would equate to approximately N173.07 per hour. He argued that this misinterpretation leads to significant distortions in salary structures, causing financial strain on employers. In other jurisdictions, changes in minimum wage do not drastically affect overall salary structures. Employers can adjust to wage increases by modifying work hours and enhancing productivity, while employees might work additional hours elsewhere.
The erroneous fixation of a monthly minimum wage has led to bloated compensation structures that employers struggle to maintain. Fashola suggested that institutions paying salaries instead of wages might not be legally bound by the Minimum Wage Act, explaining why some employers ignore the law.
Fashola’s comments underscore the need for a clear distinction between wages and salaries in legislative contexts. His remarks suggest that the ongoing conversation on minimum wage should consider constitutional definitions and global best practices to avoid economic distortions and ensure sustainable compensation frameworks.
