Private sector opposes government's ulilateral minimum wage fixation

The private sector has opposed the government's unilateral minimum wage hike, and asked not to hike the minimum wage at the time of pandemic.

Issuing a joint statement, the three private sector representing bodies said that the raised minimum wage to workers, which the government is implementing from new fiscal year, cannot be implemented as the second wave of the Covid-19 prolongs and continue to impact businesses and the economy further.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC), in the joint statement, said that more than 700,000 businesses across 54 districts across the country have been affected due to the ongoing prohibitory order. As most of them are small and medium entrepreneurs (SMEs), it will be difficult for the private sector to manage their daily expenses, they said.

"As businesses are already finding it difficult to make regular payment to workers, we cannot implement the increased minimum wage, if situation further deteriorates,” the press note reads, adding that increment of wage to workers is untimely and might also impact foreign investors and investment in Nepal.

The government has increased minimum wage of labourers from Rs 13,450 per month to Rs 15,000. It has been already published in the Nepal Gazette on May 4. 

Expressing reservations against the government's recent decision of increasing minimum salary of workers, the private sector also has asked the government not to interfere in the arrangement of fixing wages by mutual consent.

At a time, when the private sector has been unable to get any respite from the government despite announcement in fiscal and monetary policy. "In the current context, the private sector is taking all possible measures to improve the supply chain and promote economic activities as far as possible," the press note reads, adding that special emphasis should be placed on measures to keep the economy afloat and save employment. "The pandemic has affected tourism and dependent industries for more than a year and has further impacted SMEs."

At present, many tourism-related enterprises have reached a mutual agreement with their staff regarding pay in the absence of work," the press note reads, adding that increasing the minimum wage will further affect these businesses and entrepreneurs.