Introduction
Employers today must balance business needs with a growing set of legal obligations. In Nigeria, recent legislative and regulatory developments — including a statutory minimum wage increase, new data-protection rules, and updates to health and compensation regimes — make compliance especially important. Getting facts wrong can cause fines, disputes, and reputational damage; this article updates employers on the key compliance issues they should prioritise. (GLI)
1. The current labour-law landscape (what to watch now)
The Labour Act remains the core statute governing employment relationships in Nigeria, but it sits alongside more recent laws and instruments such as the Pension Reform Act, the Employee Compensation Act, the National Health Insurance Act (NHIA 2022), and the Nigeria Data Protection Act (NDPA 2023). Employers must treat the combination of these laws as their compliance baseline. (ICLG Business Reports)
2. Minimum wage — what changed and what it means for employers
In July 2024 the National Minimum Wage (Amendment) Act was signed into law, raising the national monthly minimum wage from ₦30,000 to ₦70,000, with the new rate made effective retroactively from 1 May 2024. The law also shortened the statutory wage review cycle and lists categories and small employers who may be exempt (for example, employers with fewer than 25 employees, part-time or seasonal workers in some cases). Employers should check whether their workforce or contracts fall inside any statutory exemption and must ensure they have paid any retroactive difference where applicable. (GLI)
3. Employment contracts and documentation — statutory requirements
Section 7 of the Labour Act requires that employers provide a written statement of employment terms to (most) workers within three months of commencement — and the Labour Act still sets minimum terms for “workers” (with best practice extending many of those standards across all employees). Clear, written contracts reduce disputes — and courts increasingly expect proper documentation. Make sure your templates specify job scope, probation, notice periods, pay structure, and termination procedures. (ICLG Business Reports)
4. Wages, statutory deductions and remittances
Employers must ensure timely payment of wages and correct statutory deductions/remittances. Key items to track include:
- PAYE (Personal Income Tax) remitted to State tax authorities;
- Pension contributions under the Pension Reform Act — minimum 10% employer and 8% employee of pensionable emoluments (or higher if agreed). Employers must remit contributions to approved Pension Fund Administrators promptly. (pencom.gov.ng)
Other statutory funds (where applicable) include NSITF/Employee Compensation contributions and any sectoral levies (e.g., ITF), plus NHIA registration/contribution obligations for employer-covered staff under the NHIA framework. Keep accurate payslip and remittance records — they are commonly requested in audits and disputes. (admin.theiguides.org)
5. Working hours, leave entitlements and overtime
The Labour Act prescribes the basic framework for working hours and rest days (commonly interpreted as eight hours/day or 40 hours/week for many categories), and it also sets minimum leave entitlements (e.g., annual leave after 12 months, and maternity leave provisions for female “workers” under the Act). Employers should ensure company policies reflect both the Labour Act minima and any improved entitlements agreed in contracts or by organisation policy. (ICLG Business Reports)
6. Termination, redundancy and exit obligations
Termination must follow contractual notice rules and, for “workers,” the Labour Act’s minimum notice periods. Redundancy and mass dismissals attract additional statutory and procedural considerations — employers should document the business rationale, follow fair selection/consultation processes, and honour severance/terminal benefits as required. Failure to follow due process is a common cause of successful claims at the National Industrial Court. (ICLG Business Reports)
7. Workplace safety and the Employee Compensation framework
Employers have statutory duty of care for workplace injuries under the Employee Compensation Act and related schemes administered through bodies such as NSITF. This includes safety measures, training, accident reporting and maintaining required insurance / contributions — non-compliance can trigger significant liabilities and penalties. (admin.theiguides.org)
8. Data protection & employee privacy — new duties under NDPA 2023
The Nigeria Data Protection Act (NDPA) 2023 introduced modern data-protection duties for employers who process personal data. Employers that process large volumes of personal data or sensitive categories may now be required to: appoint a Data Protection Officer (DPO), perform data mapping/data protection impact assessments, document lawful bases for processing, implement retention limits and security controls, and register with the data regulator where required. Non-compliance risks fines and reputational harm. Update your HR data-handling practices and vendor contracts to reflect NDPA obligations. (DLA Piper Data Protection)
9. Emerging compliance areas you should not ignore
- Remote / hybrid work: update policies to address hours, monitoring, and digital security.
- Anti-harassment & DEI: regulators and courts increasingly expect proactive measures and investigations.
- Digital records & e-signatures: ensure legal defensibility of digital contracts and records.
- Sectoral developments: e.g., the NHIA Act changes and proposed bills affecting domestic workers and whistleblower protections — monitor sector-specific changes. (GLI)
10. Practical compliance checklist (quick actions for employers)
- Confirm minimum wage exposure: update payroll to ₦70,000 minimum where applicable and reconcile any retroactive pay (May–July 2024) as required by the Minimum Wage Act. (GLI)
- Audit contracts: ensure written statements are issued within three months and reflect notice, wages and termination rules. (ICLG Business Reports)
- Remit pension & statutory deductions on time: verify employer (10%) and employee (8%) pension calculations and remittance processes. (pencom.gov.ng)
- Review safety & compensation procedures: confirm NSITF/ECA contributions and incident reporting are in place. (admin.theiguides.org)
- Update HR data practices: data mapping, retention schedules, and appoint a DPO if required. (DLA Piper Data Protection)
- Train managers: on updated leave, termination, and disciplinary processes to reduce exposure to unfair-dismissal and benefits claims. (ICLG Business Reports)
11. How Eleon Talent Partners helps
Eleon Talent Partners offers practical, audit-driven services to make compliance manageable:
- HR compliance audits and gap reports;
- Contract and policy drafting aligned with current law;
- Payroll and statutory remittance health checks;
- Manager training on lawful people practices;
- Data-protection readiness assessments for HR records.
Our goal is to convert compliance into a competitive advantage — preventing disputes and strengthening employer brand.
Conclusion
Staying compliant under Nigerian labour law is now more dynamic than ever: a notable statutory minimum wage increase, modern data-protection duties, evolving social-insurance frameworks and sectoral law developments all mean employers must be proactive. Treat compliance as a regular governance activity — audit, update, train, and document — and bring in specialists where needed to avoid exposure.
If you’d like, Eleon Talent Partners can run a complimentary compliance snapshot (payroll + contracts + policies) to identify your top 5 legal risks and quick remediation steps.
Contact Eleon Talent Partners to schedule a compliance review.