Salary Compensation Based on 3.7% Inflation: Rs 9.2 Billion Cost for Private Sector if Universal Payment is Implemented
On November 26, a tripartite negotiation regarding salary compensation for 2026 commenced, led by Labor Minister Reza Uteem. The meeting, held at Victoria House in Port-Louis, brought together union and employer representatives. A technical committee is expected to convene soon to discuss and finalize the compensation amount.
The meeting featured a presentation by Statistics Mauritius, which projected an inflation rate of 3.7% for 2025. This figure was immediately contested by union representatives, who argued that it does not accurately reflect the real economic conditions faced by workers and is insufficient to account for the erosion of purchasing power.
Unions proposed compensation amounts ranging from Rs 855 to Rs 1,694, while employers have yet to disclose their figures. Initial estimates from Business Mauritius suggest that if a universal compensation is implemented based on the 3.7% inflation rate, the total cost for businesses could reach Rs 9.2 billion, according to Pradeep Dursun, COO of the organization.
Following this initial round of discussions, the technical committee will meet again shortly to delve deeper into the analysis and determine the final salary compensation for 2026. For reference, the compensation awarded in 2025 was Rs 610 for employees earning less than Rs 50,000 per month.
Minister Uteem acknowledged the concerns raised by both employers and unions. Employers voiced worries about potential business closures due to their inability to absorb the salary compensation. In response, the government is being urged to provide targeted assistance to help these companies cope with rising costs.
Unions, on the other hand, are demanding adequate compensation in light of the increased cost of living, disputing the inflation figures provided by Statistics Mauritius and asserting that the actual price increases for essential goods far exceed official data. Several union federations have submitted proposals requesting that compensation not be limited to those earning less than Rs 50,000.
The minister stated that employer and employee representatives have until December 1 to submit their recommendations. Once all proposals are received, the Ministry of Labor, in conjunction with the Ministry of Finance, will review the data. Another tripartite meeting will be scheduled, with the date to be determined by the Cabinet, to finalize the salary compensation amount.
Uteem emphasized that salary compensation is a matter affecting all sectors, both private and public, and it requires serious consideration, taking all technical and economic parameters into account.
