The Federal Government and private sector employers may be heading for a confrontation over a proposed increase in the Nigeria Social Insurance Trust Fund (NSITF) employee compensation levy, with employers warning that a hike could trigger job losses and factory closures.
Under the Employees’ Compensation Act (ECA) 2010, employers are required to contribute a minimum of one per cent of their total monthly payroll to the Employees’ Compensation Fund, which provides medical care and financial support to workers affected by workplace injuries or death.
The Federal Government, however, advocated a review of the levy at the Safe Workplace Intervention Project (SWIP) annual stakeholders’ forum in Lagos.
Minister of State for Labour and Employment, Mrs Nkeiruka Onyejeocha, described existing compensation for families of deceased workers as inadequate, insisting that workplace safety is a legal obligation and compensation standards must improve.
She stressed that employers must view safety as an investment rather than a cost, adding that the administration would not compromise on occupational safety and health, especially where workers lose their lives in the course of duty.
Employers, on their part, expressed strong reservations.
Speaking on behalf of the private sector, Seplat Energy Plc’s Director of Corporate Services, Dr Steve Ojeh, warned that increasing the levy could worsen economic pressures on businesses, limit job creation, and force some factories to shut down, urging government instead to consider reducing the current one per cent contribution to help businesses survive and protect jobs.