Ghana’s Employment Minister announces 11 percentage point increase in daily minimum wage

The Minister for Employment, Ignatius Baffour Awuah, says the 2020 National Daily Minimum Wage (NDMW) has gone up by 11 percentage point over the 2019 figure of GH¢10.65 to GH¢11.82, effective from January 1, 2020.

Ignatius Baffour Awuah, Minister of Employment and Labour Relations

This is in pursuance to the Labour Act, 2003 (Act 651) section 113 (1) (a) and the Public Financial Management Act, 2016 (Act 921).

Speaking at a news conference to announce the new minimum wage, Mr Baffour Awuah said all establishments whose Daily Minimum Wage is below the new NDMW to adjust their wages accordingly starting from the implementation date.

He said: “Any establishment, institution or organisation that flouts the new rate shall be sanctioned in accordance with the law”.

He added they reached this agreement at the National Tripartite Committee (NTC) meeting on Monday, August 26, where they concluded negotiations. The NTC also recommended that the minimum wage should be tax-exempt.

He said the Public Services Joint Standing Negotiating Committee (PSJSNC) comprising Government, represented by the Fair Wages and Salaries Commission, Ministry of Employment and Labour Relations, Ministry of Finance on the one part, and Organised Labour, Associations and Institutions on the other part, concluded negotiations and reached agreement on the Base Pay for 2020 per day.

Mr. Baffour Awuah said the PSJSNC also agreed that the current Base Pay on the Single Spine Salary Structure should be increased by 12% across board for the year 2020 at the existing pay point relativity of 1.7%, effective January 1, 2020.

The Base Pay is therefore increased from GH¢9.10 per day in 2019 to GH¢10.19 per day in 2020.

He said the Social Partners had also agreed to revise the prevailing rates of allowances expressed in the absolute amounts on the categories 2 and 3 allowances to new levels to also take effect from January 1, 2020.

He said the PSJSNJ also agreed that Ministries, Departments, and Agencies should take appropriate steps to give effect to the revised Categories 2 and 3 Allowances in accordance with new guidelines to be issued by the Ministry of Finance.

“The Government and its Social partners wish to reiterate their commitment to the improvement of incomes and productivity in both the public and private sectors of the Ghanaian economy,” he added.

Dr Anthony Yaw Baah, Secretary-General, Trades Union Congress (TUC), Ghana, representing Organised Labour, said the agreement reached showed that their social partnership is deepening.

He added that they are aware workers deserve better than that and promised to continue working around the clock to ensure that “workers take-home pay actually take them home”.

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