Employers will struggle to pay new minimum wage – Association

Business News of Wednesday, 21 January 2015

Source: citifmonline.com

Haruna Iddrisu Minister Trade

The Ghana Employers’ Association (GEA) has in response to the announcement of a new minimum wage said they will struggle to pay.

The National Tripartite Committee pegged the National Daily Minimum wage at Ghc7 after approving the base pay rate at 16.7 percent.

The 16.7%, according to the Employment and Labour Relations Minister, Haruna Iddrisu, would help the Controller and Accountant General facilitate the payment of wages in the public sector.

But speaking on Eyewitness News the Chief Executive Officer of GEA, Alex Frempong said that most businesses in the country are not in good financial position to pay the new minimum wage.

“Some organizations or businesses apply to the Labour department to pay something other than the minimum wage because the businesses are not able to support the minimum wage.”

He explained that “realistically some businesses are not doing well and setting the minimum wage at Ghc7 will create some difficulties for them.”

Mr Frempong therefore asked the government to address the challenges of small businesses in order for the new minimum wage to be effective.

“I think it is something the we need to a have an open dialogue on how small businesses can be able to absorb economic shocks in the country, so that they can operate effectively and be in the position to pay wages that will really support…employees in this sector.”

The Chief Executive Officer revealed that the minimum wage will only affect individuals or enterprises that are paying below the stated amount.

“The communiqué is only talking about businesses who are paying below the national daily minimum wage. All other enterprises that employ workers will use their own internal mechanism to review the terms and conditions of service; to review wages.”

“If you are paying Ghc6.5, automatically you have to operate at the threshold of Ghc7,” he added.