Consultative Labor Commission agrees to new national minimum wages

25 Apr 16

MOZAMBIQUE

IMPACT – MEDIUM

What is the change?  The Mozambican Consultative Labor Commission has announced that it reached consensus last week on new national minimum wages. The commission’s agreement will now be submitted to the Council of Ministers for approval.

What does the change mean? As government work permit application fees in Mozambique are calculated as a multiple of the national minimum wage level, the cost of applying for work permits in Mozambique will increase once the new minimum wages are approved and published by the Council of Ministers.

  • Implementation time frame:The new minimum wages are expected to be published by May 1, but will be backdated to April 1.
  • Visas / Permits Affected:Short-term and long-term work permits
  • Who is Affected:Foreign nationals applying for both short-term and long-term work permits or work permit renewals in Mozambique.
  • Business Impact:The new minimum wages will increase the costs of applying for work permits.
  • Next steps:Details of the agreement will not be published until the Council of Ministers has discussed and approved it, but the new national minimum wages are expected to increase by at least 3.6 percent. New minimum wages are always backdated to April 1 of the current year.

Background: The Mozambican Consultative Labor Commission, made up of representatives from employers, trade unions and the government, has announced that it has reached consensus on the new national minimum wages in all nine business sectors. The commission’s agreement will now be submitted to the Council of Ministers.

Since 2007, Mozambique has no longer had a unified statutory national minimum wage; instead, the government sets different national minimum wages for each sector of the economy. Last year, Mozambique had 14 separate national minimum wages. The government only determines the national minimum wages; in the private sector, wages above the statutory minimum are primarily determined by collective bargaining. However, the national minimum wages have a direct impact on work permit applications in Mozambique, as the government fee for such applications is calculated as a multiple of the national minimum wage level in the relevant business sector (either three times or 10 times the monthly national minimum wage, depending on business sector and category of work permit).

BAL Analysis: Given the correlation between minimum wages and the government work permit application fees, employers and individuals should factor the new minimum wages into their budgets for foreign national employees.

This alert has been provided by the BAL Global Practice group. For additional information, please contact your BAL attorney.

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