News FlashesOctober 4, 2023

CRS News Flash 2 October 2023 – PAKISTAN – Minimum Wages and EOBI Contributions

OCTOBER 2023 – PAKISTAN
MINIMUM WAGES AND EOBI CONTRIBUTIONS

It is important that employers note the following:

Employees Old Age Benefits Institution (EOBI) contributions

On 4 August 2023 the Ministry of Overseas Pakistanis and Human Resource Development issued a notification letter to employers to inform them of the amendments in the Minimum Wages Ordinance, 1961 for unskilled workers.

 

A national minimum wage (NMW) does not exist in Pakistan, as each province has its own minimum wage. The minimum wages affect the contributions to the EOBI. The Employees Old Age Benefits Act, 1976 is applicable to all companies with five or more workers, whether contractual or regular, who are employed or were employed during the past 12 months.

Employers pay a contribution equal to 5% of the minimum wage while employees pay 1% of the minimum wage.

The provinces with their respective minimum wages to date are as follows:

·        Balochistan – Rs 32,000 pm

·        Islamabad Capital Territory – Rs. 32,000.00 pm

·        Khyber Pakhtunkhwa – Rs 32,000 pm

·        Punjab – Rs 32,000 pm

  • Sindh – Rs 25,000 pm (see note)
The country does not have a minimum wage for skilled labour. It is between the employer and the employee to decide during a contract negotiation.

Note
The Employer’s Federation of Pakistan (EPF) issued Circular #11 on 23 June 2023 regarding guidelines for minimum wage compliance with Sindh Government Notification No. SOL(II)/13-3/2016, which states the following:
We would like to bring to your knowledge that following the announcement of the provincial budget for the fiscal year 2023-2024 in the Sindh Assembly by Sindh Chief Minister Murad Ali Shah, an increase of 35% in employee salaries was announced, but so far, no official notification regarding the increase in the minimum wage has been issued/released by the Sindh Minimum wage Board. Therefore for the purpose of minimum wage for the time being and pending any further notification, companies should refer and comply to the Government of Sindh Labour & Human Resources Department Notification No. SOL(II)/13-3/2016, under which the minimum wage of unskilled adult and juvenile workers employed in industrial/commercial establishments in Sindh was set at a monthly rate of Rs. 25,000 per month.

The respective minimum wage notifications for each province were published on various dates and can be found by following the links below:

·        Government of Pakistan: No. EOBI/RO/ISB/2023/14563 of 4 August 2023

·        Balochistan: No. SO(Dev:)ll(L)7-3/2023/L&MD/ 268 /- of 8 September 2023

·        Islamabad: No. ALDW 8(20)-ICT/2021-325 of 31 July 2023

·        Khyber Pakhtunkhwa: No. SOL/LD/8-1/2023/MWB:5264-78 of 21 September 2023

·        Punjab: No. SO(D-II)MW/2011 Punjab Gazette No. L-7532 of 20 September 2023

Sindh: No. SOL(II)/13-3/2016 of 23 June 2023

 

 

 

Contact our legislation team on info@crs.co.za if you require any additional information.

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