National minimum wage increases take effect

18 Apr 18

MOZAMBIQUE

IMPACT – MEDIUM

What is the change? Minimum wage rates will increase between 6 and 18 percent in most sectors of Mozambique’s economy.  

What does the change mean? Companies are now subject to the new, higher pay thresholds. They will also see an increase in work permit application fees, which are tied to industry-sector minimum wage rates.

  • Implementation time frame: The new minimum wage rates were announced Monday and take effect immediately.
  • Visas/Permits Affected: Short-term and long-term work permits.
  • Who is Affected: Employers and foreign nationals applying for short-term or long-term work permits or work permit renewals.
  • Business Impact: Businesses must make sure they are in compliance with the new wage rates. The wage hikes will also increase the costs of applying for work permits.

Background: Mozambique does not have a single minimum wage, but instead sets wage thresholds by economic sector. Below is a look at wage increases in key industry sectors for 2018 (all figures in Mozambican meticals).

Industry-Sector 2017 2018 Increase
Mining Extraction (Large Enterprises) 6,963 MZN 8,263 MZN 18.7 percent
Small Mines/ Quarrying/Sand Mining 5,201 MZN 5,800 MZN 11.5 percent
Salt Mining 4,734 MZN 5,018 MZN 6.0 percent
Manufacturing – General 5,965 MZN 6,620 MZN 11 percent
Building/Construction 5,436 MZN 5,787 MZN 6.4 percent
Financial Services – Banks & Insurance Companies 10,400 MZN 11,898 MZN 14.4 percent
Financial Services – Microfinance Companies 8,400 MZN 9,240 MZN 10.0 percent
Non-Financial Services 5,525 MZN 6,250 MZN 13.1 percent
Electricity, Gas and Water (Large Companies) 7,256 MZN 7,796 MZN 7.4 percent
Electricity, Gas and Water (Small Companies) 6,002 MZN 6,422 MZN 7.0 percent

BAL Analysis: Employers should factor the new minimum wages into their budgets for foreign national employees, especially because work permit application fees are tied to minimum wage rates.

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

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