- 17
- Mar
- 2024
The need for salary increases in the private sector is more than justified, especially given the skyrocketing triple-digit inflation and the 2024 Finance Law, which has seen taxes and levies multiplied tenfold to fortyfold.
The concertation between economic organisms and the General Confederation of Lebanese Workers regarding a potential readjustment of the minimum wage is ongoing. According to caretaker Minister of Labor Moustapha Bayram, a decision is expected to be reached by next Tuesday.
A minimum wage of LBP 20,000,000 is being discussed within the framework of the social dialogue. In salary increase negotiations, it is crucial that both parties, employers and employees, come out as winners.
It should be noted that since the onset of the multidimensional crisis and the dramatic devaluation of the national currency in October 2019, the minimum wage has increased only once, rising from LBP 650,000 to LBP 9,000,000.
Employers’ Reticence
Employers justify their reticence to raise the minimum wage threshold by citing the additional costs they would incur in terms of increased contributions to the National Social Security Fund (NSSF), an organism in which they have lost trust. In fact, despite having already increased their employees’ salaries in Lebanese pounds and fresh dollars, they refuse to declare these increases to the NSSF.
During a debate organized by the Economic and Social Council (ESC) on the NSSF issue, Samir Saliba, a member of the Lebanese Business Leaders’ Association and owner of MikeSport, summarized the employers' position regarding salary declaration to the National Social Security Fund.
He emphasized, “Amid the current circumstances in the country, the employers’ biggest challenge is to protect and preserve human capital, which serves as the cornerstone of our businesses' operability.” Additionally, he asserted that “no social organism can compete with employers in defending employees by offering additional advantages or concessions.”
Untrustworthy NSSF
“We no longer trust the NSSF, which has squandered our funds and those of our employees,” noted Saliba, adding that “all major businesses have taken out insurance policies with private insurance companies for their employees.”
He also decried the shortcomings in the services provided by the NSSF and the corruption prevailing within this public establishment, which is supposed to be “service-oriented.” “Some NSSF civil servants charge two million Lebanese pounds to provide us with a document,” he stated.
According to Saliba, employers are paying some kind of “racket” to the NSSF. “Provide us with a respectable service, and we will meet our obligations to the NSSF, regardless of the minimum wage and other salary brackets.”
Moreover, it is worth noting that if the minimum wage is raised to LBP 20 million, the salary bracket subject to NSSF deductions would amount to LBP 100 million.
“In a nutshell, salary increases are not a purpose. They represent a temporary measure while awaiting a structural reform that would pull the country out of the vertiginous cycle of inflation.”
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