As a business owner in Mauritius, staying compliant with the latest labor regulations is crucial. The recent introduction of the Wage Relativity Adjustment brings significant changes to employee compensation. This article provides a comprehensive guide to help you navigate and implement these new requirements effectively.
The Wage Relativity Adjustment, effective from July 1, 2024, aims to address wage disparities across various sectors. Employers must adapt quickly to ensure compliance and maintain positive employee relations.
Employers need to act swiftly to meet the following deadlines:
September 2024: Pay the adjustment alongside regular wages
July and August 2024: Settle adjustments by December 31, 2024
Accurate calculation and meticulous record-keeping are essential:
Calculate adjustments ranging from Rs 100 to Rs 3,425 based on current salaries
Record the adjustment separately from basic wages
Maintain detailed payroll records and provide copies to the Director-General
Proper reporting is crucial for compliance:
Use the new Joint Monthly PAYE/CSG/NSF return for September 2024
For July and August 2024, use the new monthly CSG return if amending previous submissions
Include both basic wage and adjustment when calculating CSG, NSF, and HRDC Training Levy contributions
Adhering to these regulations is not optional. Non-compliance may result in legal action under the Employment Relations Act. However, support is available for eligible SMEs:
Financial assistance ranging from Rs 500 to Rs 2,000 monthly per full-time employee on minimum wage
Specific eligibility criteria set by the Mauritius Revenue Authority (MRA)
Sector-specific salary scales under "Remuneration Orders"
Employees earning less than Rs 20,000 (not covered by sector-specific regulation):
Relativity adjustment = (Basic wage of December 2023 + Rs 4,925) – Basic wage of January 2024
Employees earning between Rs 20,000 and Rs 50,000 (not covered by sector-specific regulation):
Relativity adjustment = Rs 2,925
Employees holding a degree or diploma (where required for the occupation):
Minimum monthly basic wage:
Degree: Rs 25,000
Diploma: Rs 23,000
Wage Increase for Part-Time Employees (Earning less than Rs 20,000 in December 2023)
Calculation:
Rs 4,925 x (Your monthly hours) / (Full-time hours for a similar job)
Explanation:
This formula calculates a portion of Rs 4,925, based on the number of hours you work compared to a full-time employee in a similar role.
Potential changes in CSG Income Allowance for some employees
The recent implementation of the Wage Adjustment as from July 2024 (Remuneration) (Amendment No. 2) Regulations 2024 has brought significant changes to wage structures in Mauritius. To illustrate how these changes affect small and medium enterprises (SMEs), let's examine the case of Island Adventures Ltd., a fictional small tour operator in Grand Baie.
Island Adventures Ltd. employs 25 people across various roles. The company's owner, James, along with his HR assistant Amira, is tasked with implementing the new wage regulations that came into effect on July 1, 2024.
Anita, a Receptionist/Telephonist with 2 years of service, will see her salary increase from Rs 17,000 to Rs 17,277, an adjustment of Rs 277. This aligns with the new minimum wage set in the Second Schedule for her position and years of service.
Sarah, a Travel Consultant with 5 years of experience, falls into the Rs 20,000 to Rs 50,000 bracket. Her salary will increase from Rs 22,000 to Rs 24,925, a significant adjustment of Rs 2,925 as mandated by Regulation 3(3B).
Priya, a newly hired Administrative Clerk with a 3-year post-SC Diploma, started at Rs 22,500. Her salary must be adjusted to Rs 23,000 to comply with Regulation 3(3E)(a)(i), which sets a minimum wage for employees with diploma qualifications.
Ravi, a part-time Driver working 100 hours per month, will see his salary increase from Rs 11,500 to Rs 14,298.30, an adjustment of Rs 2,798.30. This is calculated using the formula provided in Regulation 3(3F)(a)(i) for part-time employees.
Retroactive Payments: All adjustments must be calculated from July 1, 2024, with arrears paid by December 31, 2024.
Record Keeping: Detailed records of wage adjustments must be maintained and provided to the Mauritius Revenue Authority.
Budget Impact: The total monthly increase for just these four employees amounts to Rs 6,500.30, necessitating budget adjustments.
Communication: Clear explanation of changes to all employees is crucial to ensure understanding and address concerns.
This case study demonstrates the varied impacts of the new wage regulations on different employee categories within a small tourism business. It underscores the importance of careful review and implementation to ensure compliance while maintaining fair compensation practices. SMEs like Island Adventures Ltd. must navigate these changes thoughtfully, balancing regulatory requirements with their operational realities.
For further information and clarification on labor regulations and salary adjustments, we strongly recommend contacting the Ministry of Labour, Human Resource Development and Training. You can find their contact details and locations of their offices across Mauritius on their website: Click Here
Regulation 3(3B): "Where the monthly basic wage or salary of an employee is not less than 20,000 rupees nor more than 50,000 rupees in December 2023, the employee shall be paid a monthly wage adjustment of 2,925 rupees as from the month of July 2024."
Regulation 3(3E)(a): "Where, in accordance with the entry requirements for any grade, occupation, job position or category, an employee possesses -
(i) a Diploma or an equivalent qualification acceptable to the employer, the employee shall be paid a monthly basic wage or salary of not less than 23,000 rupees;
(ii) at least a post-HSC first degree or an equivalent qualification acceptable to the employer, the employee shall be paid a monthly basic wage or salary of not less than 25,000 rupees."
Regulation 3(3F)(a): "For the purpose of computing the wage adjustment for a part-time employee -
(i) (A) drawing less than 20,000 rupees for the month of December 2023, the amount to be added in the basic wage or salary of the part-time employee for the month of December 2023 shall be computed in accordance with the following formula -
4,925 rupees x N / W"
Regulation 3(3G): "An employer shall, in respect of the month of July 2024 and thereafter -
(a) keep, in accordance with section 116 of the Workers' Rights Act 2019, a separate record, in respect of each employee on his payroll system, of the monthly wage adjustment payable under these regulations; and
(b) provide a copy of the record to the Director-General in accordance with section 7 of the Social Contribution and Social Benefits Act 2021."
Second Schedule: Provides the updated monthly basic wage for various categories of employees based on years of service.
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