New national minimum wage levels released

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 pay thresholds. Work permit application fees are tied to industry-sector minimum wage rates and thus will also see an increase.

• Implementation time frame: The new minimum wage rates were announced last week, but are retroactive to April 1.
• 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 retroactive to April 1. The wage hikes will also increase the costs of applying for work permits.

Background: Mozambique does not have one set minimum wage, but rather sets wage minimums by economic sector. Below is a look at wage increases in key industry sectors. The wage minimums will cover the period from April 1, 2017 to March 31, 2018.

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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