Between the lines: A look into delayed and unpaid wages in Nigeria’s informal sector

Nigeria’s informal sector is largely unregulated, making many malpractices go unnoticed, tucked away from the public discourse, and often without consequence. Of the 3,416 respondents surveyed in our study on delayed wages in the informal sector in the country, 40% of the respondents were owed wages while 60% were not owed.

A major deterrent to placing demand for owed wages/salary according to respondents is a concern with losing out on the good relationship built with their principal/employers. Other deterrents are the prevalence of in-kind payments, limited opportunities, loose terms of reference for work, transfer of risk to employees, parallel earnings outside employees’ salaries, and informal arrangements.

The states with the highest percentages of informal workers who are owed wages are Ondo, Abia, Ebonyi, Plateau, Imo, Bauchi, Enugu, Oyo, Ekiti and Benue. Informal sector workers who responded to our survey were owed salaries in all the states surveyed except for Bayelsa, Sokoto and Yobe.

The insight from the study gives an idea of how widespread the issue of unpaid salaries/wages is in Nigeria’s informal sector, which is unarguably the country’s largest employing sector. The unavailability of regulation in the informal sector poses problems for employees, who are most times unaware of labour laws.

More so, there is the added challenge of a lack of valid contractual agreement between employers and employees, largely because employment relations are brokered and built on the foundation of family or friends, leaving room for abuses by employers and increasing the vulnerability of employees to irregular payments. For such abuses to be addressed, labour laws and regulatory bodies would have to be established to ensure that the rights of employees in the informal sector are protected. Even though labour laws exist in Nigeria, they do not appear to be remotely applied to the informal sector, largely because the sector is unsupervised by unions and regulatory bodies.

In addition to establishing policies and regulatory bodies designed to operate as checks to the informal sector, creating awareness as to the rights of employees is a major way to ensure that policies are adhered to, considering that many employees in the sector are unaware of their protection by labour laws.

Lastly, there is the challenge of the cost of seeking redress, caused by the complexities of the country’s judicial system and the inability to have or join their inability to join organized labour unions. This offers a challenge to trade unions for their respective sectors to bring these workers into their folds, and advocate on their behalf.

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