Employers owing salaries to get six-month jail, N10,000 daily interest to workers - House Bill

The House of Representatives has proposed a bill that would criminalise the delayed or failed payment of employees’ salaries by their employers and corporate entities in the country.

The bill, sponsored by Wale Hammed, House member representing the Agege Federal constituency in Lagos State, is called ‘The Employees Remuneration Protection Bill, 2023’, and has passed first reading.

Section 7 (1) of the bill stipulates that it is unlawful for any employer to “refuse or neglect to pay the remuneration of his employees, as provided under this Act.”

Section 8 (1) of the bill states that if an employee’s compensation remains unpaid beyond the specified period permitted by this legislation, the employee may submit a written demand to their employer for the payment of their entitlement if they wish to assert their claim.

Therefore, “if an employee fails to remit payment within five business days following service of a demand under Section 9 of this bill, the employee may petition the court for redress by filing a motion on notice.”

According to the bill, employers found guilty of failing to pay the salaries of their workers risk three to six months imprisonment, without the possibility of a fine.

Furthermore, a corporate entity that fails to adhere to a court order regarding the remuneration of its employees, risks a fine of N10,000 daily, or “be sealed off for a period not exceeding three months, provided that the default extends beyond two months.”

The bill also imposes a N10,000 penalty on any officer or agent of the organisation, government parastatal, agency, body, or institution who deliberately or knowingly authorises or permits the default or noncompliance with the directive until it is complied with.

Employers, by this legislation, are obligated to provide written terms of employment to resuming employees within fourteen working days of the employee’s return to work for terms of employment exceeding one month.

The employment contract, which shall be executed by the employer and employee, shall comprehensively outline the terms and conditions, remuneration, and methods of payment, in addition to the character of the employment and the procedure for terminating it by either party.

Also, in Section 27 of the bill, an employee’s petition to the court for payment of remuneration shall not serve as grounds for “disciplinary action, inquiry, suspension, or termination of the applicant by the employer.”

Meanwhile, Section 28 of the bill states that in the event of an employer’s bankruptcy, prioritisation shall be given to the payment of all outstanding remuneration to employees.