New national minimum wage levels released

What is the change? Minimum wage rates will increase between 7 and 11 percent in most sectors of Mozambique’s economy.  

What does the change mean? Companies are subject to the new pay thresholds but may set wages higher. Additionally, work permit application fees will increase because they are tied to the relevant industry-sector minimum wage rate.

• Implementation time frame:The new minimum wage rates take effect immediately and are retroactive to April 1, 2016.
• Visas/Permits Affected:Short-term and long-term work permits, including renewals.
• 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 increase the costs of applying for work permits.
• Next steps:Mozambican Labor Minister Vitória Diogo announced the new monthly wages at the end of the weekly Government Cabinet meeting, signaling immediate implementation.

Background: The Mozambican Consultative Labor Commission announced in April that it had reached consensus on new national minimum wages. Most increases will range between 7 and 11 percent.

BAL Analysis: Given that work permit application fees are tied to minimum wage rates, employers and individuals should factor the new minimum wages into their budgets for foreign national employees.

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

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