A 20 percent increase in minimum wages for unskilled workers may have an incremental effect on the overall pay bill of an enterprise. This was stated by chairman of Industrial Relations Committee of Employers' Federation of Pakistan (EFP) Fasihuddin Siddiqui, while briefing newsmen after the committee's meeting held at a local hotel on Monday.
He said employers might be pushed by unions to increase salary of workers in other categories of employment, ie, skilled, semi-skilled, highly skilled, etc, in addition to increase in wages by way of annual increment and collective bargaining.
The financial cost, which is already high because of tax and levies, would further increase. Considering this scenario, it should be taken into account whether the 20 percent increase in wages is advisable.
Fasihuddin Siddiqui said employers were not taken into confidence before proposing amendments in Employees' Old-Age Benefit Institution (EOBI) act.
He said contribution of employers was increased to 6 percent instead of .05 percent while workers contribution was proposed one percent of the wage instead of Rs20.
He said increase in contribution was made to meet huge expenses of the EOBI, which is more than Rs 550 million and employers bear the entire burden.
He demanded of the government that the EOBI should be handed over to the State Life Insurance Corporation, which has such infrastructure to provide this service at minimum expenses.
It could be handed over to real professionals after its privatisation, he added.
"Employers will not accept the 20 percent increase in wages before negotiation with the government," he added.
EFP secretary-general Professor M. Matin Khan and members of the managing committee U.R. Usmani, K.M. Noman and Tariq Saeed were also present on the occasion.