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Minimum Wages in Tanzania -Frequently Asked Questions 2014

Frequently Asked Questions
Is there a separate legislation relating to minimum wages in Tanzania? What is the National Poverty Line?
Do one or more minimum wage/s exist that is determined by the law? How often is Poverty Line updated?
At what level are minimum wages determined? When the Poverty Line was last updated?
On what basis is minimum wage calculated? What is the percentage of Minimum Wage relative to the current poverty line?
In case of weekly/monthly minimum wage, are they based on a fixed number of hours? What is the incidence of minimum wage (s) in the national labour force (wage earners only)?
Are governmental bodies, employer and/or trade union representatives involved in minimum wage setting? How is Minimum Wages compliance regulated?
How are upratings (Adjustments) of minimum wages decided upon? Which legal sanctions can be applied if compliance is lacking?
Which are components of Minimum Wage in Tanzania? Are sanctions often being applied?
How frequently is the fixed component of minimum wage updated? Are employer and or trade union representatives involved in compliance procedures?
What is/are the yardstick on which minimum wage upratings are based? To whom/where can individuals complain, if they think they are earning less than the minimum wage?

 

Frequently Asked Questions Minimum Wages by Law
Is there a separate legislation relating to minimum wages in Tanzania? The Labour Institutions Act, No.7 of 2004 among other things provides for Minimum Wages. Generally, what this legislation does is that it establishes all the Labour Institutions, provide for their functions, powers and duties and other matters related to them. Wage Board is one of the Institutions, and it forms part V of the legislation. Under this part several sectoral Wage Boards are appointed by the Minister and empowered to investigate remuneration and terms and conditions of employment in the various sectors and report the findings and recommendations to the Minister.  From the findings the Minister is empowered by the same Legislation after considering the recommendations to make a Wage Order determining the minimum wage and other conditions of employment for employees in any sector and area of the economy. Then an order termed as the Regulation of Wages and terms of employment order (Wage Order) is established and published via Government Notice.  This order now sets the Minimum Wages sector wise.Sectoral Minimum wages are provided for under Part A of Regulation of Wages and terms of Employment Order (The Wage  Order). This is currently done by order GN 196 which was published on 28th June 2013
Do one or more minimum wage/s exist that is determined by the law? Several Minimum Wages exist according to the different and main sectors of the economy. However not all sectors are covered. So far we have 8 number of sectors and some sectors with  some sub divisions/categorization and about 15 different minimum wages.  For those sectors which do not have an expressly provided minimum wage we have a category of other sectors and they therefore fit therein. All these minimum wages are provided for under the law i.e Regulation of Wages and terms of employment order, 2010.
At what level are minimum wages determined? The Minimum Wages are determined sector wise i.e according to the sector of the economy an enterprise is falling under. Since we have 12 sectors then the Minister appoints 12 wage boards each empowered to investigate on the remuneration and other terms of employment and send the recommendations to the Minister .The current Minimum Wage Order has twelve sectors which are; Health Services, Agricultural Services, Commerce, Industry and Trading services, Communication services, Mining services, Private Schools,  Domestic and Hospital Services , Private Security Services, Energy services, Transport services, Fishing and Marine services and Construction services. Some sectors do have a sub categorization as can be seen in the minimum wage table.
On what basis is minimum wage calculated? Minimum Wage is calculate hourly, daily, weekly, fortnightly and monthly. It is designed in such a way it take into consideration to bring the balance between the cost of living and the enterprises ability to pay and sustain. Hence it is not an easy process so that it does not make employers nor employees get it rough.
In case of weekly/monthly minimum wage, are they based on a fixed number of hours? Yes, Minimum Wages are calculated per 45 hours per week. As per section 19 of The Employment and Labour Relations Act, 2004 ordinary working hours are 45 hours in a week and nine hours in a day. And six days in any week.
Are governmental bodies, employer and/or trade union representatives involved in minimum wage setting? YES, representative of employers, trade union and government are involved in minimum wage setting. Section 35 (3) of The Labour Institutions Act, 2004 provides for composition of wage board that it shall comprise a Chairperson (who is usually the government)and a member  nominated by National Employers organization and National Trade Union confederation each to represent the interest of employers and employees respectively.
How are upratings (Adjustments) of minimum wages decided upon? Adjustments are done by the Minister after getting recommendations from different Wage Boards as provided under Regulation of Wages and terms of employments, Order, 2013.
Which are the components of Minimum Wage in Tanzania? According to the Regulation of Wages and terms of employments, Order, GN 196, 2013 the components/wage board sectors of the Wage Order consists of ; Health Services; Agricultural Services; Communication services; Domestic and Hospital services; Private Securities; Energy services; Transport services; Construction services; Mining; Private Schools; Trades, Industries and Commercial Services; Fishing and Marine services
How frequently is the fixed component of minimum wage updated? The Labour Institutions Act, 2004 does not provide for the frequency of updating minimum wage. However the Wage Boards have been mandated to investigating anything about the remuneration and terms of employment including updating the components of Minimum Wage Order. This year (2013), the minimu wage has been revised by new order numbered GN 196.
What is/are the yardstick on which minimum wage upratings are based? Section 37 of the Labour Institutions Act, 2004 provides that in any investigation for recommended minimum wages, the Wage Board shall take into account among others relevant factors such as ;the ability of the employer to carry on their businesses successfully, the operation of small, medium and micro-enterprise, the cost of living, the alleviation of poverty, the minimum subsistence level, the remuneration and terms and conditions of employment  of employees employed in the East African Community, any collective bargaining providing for  remuneration and terms of conditions of employment in the sector, article 22 and article 23 of the Constitution of the United Republic of Tanzania (these provides for Right to Work and Right to own property respectively), any applicable Convention or recommendation of ILO and any other relevant factor.
What is the National Poverty Line? National Poverty line is the minimum amount of money which is thought necessary for a person to meet at least basic needs in the country. In Tanzania it is Tsh. 13, 998 (equivalent of 8 USD) for 28 days, altenatively we can say it is Tsh 500 (0.3 USD) per person per day. As per review of 2007.
How often is Poverty Line updated? Poverty line is adjusted regularly basing on the inflation index; from the 2001 poverty line which was Tsh 7253 per person per 28 days (equivalent of 4 USD) as the base line. Before 2001 it was updated in 1991.
When the Poverty Line was last updated? It was last updated in July 2007
What is the percentage of Minimum Wage relative to the current poverty line? National (sectoral) minimum Wage/Poverty line. As per 2007 statistics 33.6% population is under poverty line as per National Bureau of Statistics. This will possibly change when the NBS release the findings of ILFS which is now being organized.
What is the incidence of minimum wage (s) in the national labour force (wage earners only)? Not applicable
How is Minimum Wages compliance regulated? Minimum Wage Compliance is regulated through Labour Administration and Inspection Services Department which is under the Ministry of Labour and Employment. This department is headed by The Labour Commissioner. Labour Officers under this department have been empowered by the Labour Institutions Act, 2004 to oversee compliance with employment standards including Minimum Wage Order and other terms and conditions of employment.
Which legal sanctions can be applied if compliance is lacking? First and foremost If Labour Officer reasonably believes that an employer has not complied with the labour laws he may issue a compliance order and if the employer fails to comply with the lawful order the employer will be prosecuted and if convicted he shall be liable to a fine not exceeding Five Million Shillings, imprisonment for a period of 3 months or both fine and imprisonment. This is according to section 64 (2) of the Labour Institutions Act, 2004
Are sanctions often being applied? We have very few cases where sanctions have been applied as very few cases are being prosecuted.
Are employer and or trade union representatives involved in compliance procedures? Not really, involvement is at the inspection level, when at the work places Labour Inspectors usually interview both employees or trade union if available and a representative of the management. However incase there is a dispute of right or of interest employees registered under trade unions can approach the Commission for Mediation and Arbitration (CMA)through their branch .Employers can also approach the Commission for Mediation and Arbitration (CMA)through their employers a organiations
To whom/where can individuals complain, if they think they are earning less than the minimum wage Individuals can complain or file a dispute to claim for the balance at the Commission for Mediation and Arbitration (CMA) either themselves or through their respective trade unions. CMA is a labour institutions established under section 12 of the Labour Institutions Act, 2004 with the function of mediating any dispute referred to it in terms of any labour law; determine any dispute referred to it by Arbitration. The Labour Commissioner 12 may under section 47(8) the labour institutions Act, 200 apply to the Labour Court to enforce the compliance if the employer has not complied with the order.And it compliant can be filed in Labour court as well as per the Labour Institutions Act, 2004.
 2013.
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