Reps propose jail term for employers over delay or nonpayment of employees’ salaries

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The House of Representatives is proposing a bill to criminalise non-payment or failure to pay salaries by employers of labour and corporate bodies across the country.

When passed into law, employees can demand payment from their employer by submitting a written claim.

The bill, sponsored by Wale Hammed, a member representing the Agege Federal Constituency, Lagos State, titled, “The Employees Remuneration Protection Bill, 2023, has passed its first reading.

Section 7 (1) of the bill provides 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.”

As per the bill, employers failing to pay their workers’ salaries could face imprisonment for three to six months, without the option of a fine.

Likewise, a company that disregards a court order related to employee compensation may incur a daily fine of N10,000 or face closure for a maximum of three months, provided the default persists beyond two months.

Moreover, the bill stipulates a N10,000 penalty for any official or representative of an organization, government agency, or institution who knowingly allows non-compliance until the directive is adhered to.

Under this proposed legislation, employers must furnish returning employees with written employment terms within 14 working days for contracts extending beyond a month. These contracts, binding for both parties, should comprehensively cover terms, remuneration, payment methods, employment nature, and termination procedures.

Section 27 of the bill provides that 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.

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About the Author: Olusola Sorinmade

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