Today, we’re diving into a topic that’s buzzing around the Mauritian private sector: Salary Relativity. If you’re wondering how these changes might affect your business or your paycheck, you’re in the right place.
In this blog post, we’ll break down the complexities of salary relativity, explaining the key changes, their impact on different income brackets, and how they are calculated. Whether you’re an employer navigating the new regulations or an employee curious about your paycheck, we’ll provide the clarity you need.

What is Salary Relativity?

Salary relativity is essentially about maintaining fair pay gaps between different job roles within a company or industry. It’s about ensuring that people in more skilled or demanding positions earn proportionally more than those in less complex roles. This helps to recognize the value of experience, qualifications, and responsibilities, and it’s key to keep employees motivated and attracting top talent.

What employers need to know:

• Salary relativity adjustments are sometimes necessary to keep pay structures fair and competitive, especially when minimum wages or living costs increase.
• It’s important to communicate any changes in salary relativity clearly to employees, explaining the rationale behind them.
• Maintaining appropriate pay gaps can boost morale and reduce turnover.

What employees need to know:

• Salary relativity adjustments can affect your pay, even if you’re already earning above the minimum wage.
• If you feel your salary isn’t reflecting your skills or experience compared to others in similar roles, you can raise this with your employer.
• Understanding salary relativity can help you negotiate a fair salary when starting a new job or asking for a raise.

Who is Impacted by Salary Relativity?

In Mauritius, the salary relativity adjustment is making waves, impacting a significant portion of the workforce. Specifically, 197,042 employees, or about 60% of the private sector workforce, are impacted. Here’s a closer look:

• 90,452 employees were earning more than Rs 11,575 (the minimum wage in December 2023) but less than Rs 20,000.
• 106,590 employees are in the Rs 20,000 to Rs 50,000 salary bracket.

These employees will see adjustments in their salaries, which are designed to address disparities and ensure fair compensation across different income levels.

Who is Not Affected?

Not everyone is part of this adjustment. Approximately 100,000 employees who are on the minimum wage won’t see changes due to this adjustment. They already received a significant increase of Rs 4,925 in January 2024, which means their salaries are already aligned with the new standards.

High Earners: Over Rs 50,000

For those earning more than Rs 50,000, totaling 36,338 workers, the situation is a bit different. These employees are advised to consult directly with their employers regarding any potential adjustments, as recommended by the Ministry of Labour.

Salary Adjustment Details

The salary adjustments range from Rs 100 to Rs 3,425. The closer your salary is to the previous minimum wage, the smaller the adjustment. Conversely, those earning closer to Rs 20,000 will see larger increases.

Payment Timeline

The salary relativity adjustment is effective from July 1st, 2024, so you’ll see a back-pay for July included in your August salary. This means a little extra in your pocket this month!

Special Cases: Diploma and Graduate Holders

The new minimum salaries for diploma and graduate holders are Rs 23,000 and Rs 25,000, respectively. These adjustments apply not only to new hires but also to those already employed in positions requiring these qualifications. However, if you’re in a role that only requires an HSC, these rates won’t automatically apply.

Legal Considerations and Risks

Employers, take note! Failing to comply with these new salary regulations could lead to legal action under the Employment Relations Act. The government is serious about enforcing these changes to ensure fair compensation across the board.

Impact on CSG Income Allowance

With salary adjustments, some employees will see changes in their CSG Income Allowance. For instance, those previously earning below Rs 20,000 and receiving a Rs 3,000 allowance may now exceed this threshold and receive a higher salary increase, but a reduced allowance.

CSG Income Allowance amounts:

• Employees earning less than Rs 20,000: Rs 3,000 per month
• Employees earning between Rs 20,001 and Rs 25,000: Rs 2,500 per month
• Employees earning between Rs 25,001 and Rs 30,000: Rs 2,000 per month
• Employees earning between Rs 30,001 and Rs 50,000: Rs 1,500 per month

Final Thoughts

Navigating these changes might seem daunting, but remember, these adjustments aim to create a fairer work environment for all. Whether you’re an employer or an employee, understanding these changes can help you better prepare for the financial shifts ahead.

So, how are you planning to adapt to these changes? Are you ready to embrace the new salary structures?

Note: It’s always advisable to consult official government sources or seek professional advice for personalized guidance on these matters.