Nigeria is a great place to hire from, with a labour force of almost 80 million people and a reputation for diligence and perseverance. However, before hiring Nigerian employees, it is important to understand the labour laws that govern employee compensation and benefits.

Nigeria upholds a set of mandatory employee benefits that help employers ensure legal compliance and help you create an appealing work environment for employees.

Who Is Entitled to Employee Benefits in Nigeria?
In Nigeria, any employed individual, including citizens and foreign nationals working in the country, is entitled to employee benefits. However, there is an important distinction between workers and employees with both groups being eligible for certain benefits as stipulated by Nigerian labour laws.

“Workers” are defined under the Labour Act as “...employees who perform manual labour or clerical work.”

“Employees” or “Non-Workers” are those “who perform administrative, executive, technical, or professional functions.

What Are Mandatory Benefits?
Statutory or mandatory employee benefits are those legally mandated by the government, ensuring fundamental protections and entitlements for the workforce. These benefits are enshrined in Nigerian labour laws, outlining the minimum standards that employers must adhere to.

Nigerian Laws & Regulations About Employee Benefits
Nigeria's legal framework includes multiple laws and statutes that establish the foundation for employee benefits nationwide. These laws govern various aspects of benefits, from minimum wage to health insurance, shaping the obligations and rights of both employers and employees.

1. Employee Compensation Act of 2010: The Employee Compensation Act was passed to replace the previous Workmen’s Compensation Act. The act provides for employees who are disabled, injured, or killed during the course of their employment

2. Pension Reform Act 2014: The Pension Reform Act of 2014 defines the establishment of a contributory pension scheme, which applies to organisations with over 15 employees.

3. National Health Insurance Act 2022: The National Health Insurance Authority Act (NHIA Act) establishes and empowers the NHIA to ensure the provision of health insurance for all Nigerians through a mandatory mechanism in collaboration with state health insurance agencies.

4. Nigerian Labour Act 2004: The Nigerian Labour Act governs all employer-employee relations in Nigeria, including compensation, unionisation, and work hours. The Labour Act is limited in scope and only applies to “workers.”

5. National Minimum Wage (Amendment) Act 2019: The National Minimum Wage Act of 2019 prescribes a mandatory minimum wage payable to Nigerian employees. The Act only applies to full-time employees at organisations with over 25 employees.

What Are the Mandatory Employee Benefits in Nigeria?
Nigeria mandates several crucial benefits under its various laws and statutes.

Minimum Wage and Working Hours
Nigeria’s National Minimum Wage Act of 2019 stipulates a minimum wage of ₦30,000 per month for full-time employees at organisations with over 25 employees.

A work week in Nigeria is set at a maximum of 48 hours over 5 days, with defined hourly limits for overtime work and corresponding compensations. A workday in Nigeria is 8 hours and employees are entitled to a 1-hour break every 6 hours.
The mandatory minimum wage and regulated working hours are fundamental pillars of Nigeria's labour laws.

Leave Entitlements (aka Paid Time Off)
Employees are entitled to a minimum of 6 days of paid annual leave after completing 12 months of employment. Additionally, sick leave extends to 12 days annually, requiring valid medical certification for compensation. This provision aims to ensure the well-being of employees and their right to adequate rest and recovery.

Employees must also enjoy paid leaves during the 11 public holidays declared as paid work holidays by the Nigerian government.

Maternity and Paternity Leave
Women working in the public sector must be granted at least 16 weeks of maternity leave, while those in the private sector are entitled to 12 weeks. Maternity leave can start up to 6 weeks before birth and employees must receive at least 50% of their regular salary.

Different regions in Nigeria provide varying paternity leave entitlements, showcasing a recognition of the need for parental support and work-life balance. For example, in Lagos and Enugu, new fathers get up to 2-3 weeks of paternity leave.

Pension and Insurance Contributions
Under the Pension Reform Act, both employers and employees contribute to pension funds. The employer contributes 10% of the employee’s salary, while the employee contributes 8%. These contributions ensure retirement savings for employees, enhancing long-term financial security.

As an employer, you are also required to make contributions to social security and other mandatory funds.
For example, under the Employee Compensation Act of 2010, you must contribute 1% of your total monthly payroll to the Employee Compensation Fund to assist employees or their dependants in the case of work-related injury, disability, disease, or death.
You must also provide group life insurance for Nigerian employees worth at least 3 times their annual salary.

Health Insurance
Under the National Health Insurance Act of 2022, health insurance is a mandatory provision for all Nigerian employees at organisations with more than 5 employees. This means that as an employer, you must provide health insurance to your Nigerian employees. One easy way to provide health benefits to your Nigerian employees is through an employee benefit platform like Motherboard, which aggregates health insurance from over 10 major HMOs across the country.

Other Common Benefits in Nigeria (Not Required by Law)
In addition to mandatory benefits, there are certain supplementary benefits you may offer to your Nigerian employees. While these are not required by law, they are necessary to help you attract and retain top talents, while motivating them and increasing their productivity.

You can learn more about these other benefits and how to provide employee benefits for Nigerian employees HERE

In recruitment, interviews and reviews are a two-way street. While organizations evaluate candidates to find the right fit, job seekers are equally keen on determining if a company is a good match for them. It's a mutual assessment, and in today's competitive job market, it's vital for companies to not only attract the best talent possible, but also to ensure they're not easily snatched by competitors. This is where the concept of Employee Value Proposition comes into play.

A well-structured EVP attracts prospective talent and serves as a powerful tool in retaining an organization's star performers. In this post, we'll explore the building blocks of a standout EVP, so you don't miss out on high-caliber employees that can help your business thrive.

What is an Employee Value Proposition (EVP)?
An Employee Value Proposition represents the spectrum of benefits, rewards, and opportunities that organizations offer in exchange for, or in acknowledgment of, employees' professional abilities, skills, experience, contributions, and dedicated service.

It is essentially a unique package of tangible and intangible benefits that an organization or employer curates to attract and retain employees, and also to improve their employer branding.

The Importance of a Great Employee Value Proposition
For a business to really thrive, employers need to excel on two key fronts. First, the fight for clients/customers who bring in revenue. And second, the competition for talented employees who keep the business running and can take it to greater heights. The latter is very important because the people you employ have a big impact on operational costs, business efficiency, and overall success.

In order to create a great Employee Value Proposition, you need to understand the key areas it affects. These include:

Recruitment & Employer Branding
A strong and well-defined Employee Value Proposition (EVP) acts like a magnet, pulling in top talent. In simple terms, the better your EVP, the more likely you are to attract the best people for the job. It's also a key factor in shaping your employer brand.
When you clearly communicate what job seekers can expect from your company, you present yourself as a brand that knows its values. Even if your EVP isn't as lavish, just making it transparent and communicating it well can enhance your brand's image, piquing the interest of more potential employees.

Employee Satisfaction & Retention
Attracting top talent is just one piece of the puzzle. The real challenge is keeping them. A great Employee Value Proposition not only attracts the best but also caters to their needs and expectations, ensuring they feel truly appreciated. When your employees are satisfied with the rewards and growth opportunities you provide, they're more likely to stay with your organization and even transform into devoted brand advocates.

Innovation & Performance
When employees feel recognized and well-rewarded for their efforts, they're naturally inclined to put in extra work and strive for excellence. A great Employee Value Proposition can serve as a powerful motivator, leading to increased productivity, fresher ideas and perspectives, and better business outcomes.

Work Culture
Just as your Employee Value Proposition can enhance your external employer branding, it can also significantly influence your internal work culture. A well-defined EVP communicates your organization's values and principles, which, in turn, helps shape your work culture and guide the decisions, actions, and behavior of your employees.

Legal Compliance
A standout Employee Value Proposition serves as a valuable tool for ensuring legal compliance. The more transparent it is, the simpler it becomes to assess whether it adheres to labor laws and regulations. A well-articulated EVP also makes it easier to identify potential compliance gaps and, consequently, helps avoid legal disputes, preserving your organization's reputation and nurturing deeper trust among your employees.


Key Components of a Great Employee Value Proposition
To craft an effective Employee Value Proposition, you should incorporate components that resonate with your potential hires.
Here are the key components that make up a compelling EVP:

Compensation & Benefits
While salary is often the initial concern for job seekers, it's not the sole deciding factor. An outstanding EVP includes a comprehensive compensation package, featuring both monetary and non-monetary perks and benefits. Your compensation package should encompass perks like retirement plans, health and wellness benefits, housing allowances or loans, food and grocery perks, fueling benefits, bonuses, paid time off, and profit-sharing. This shows employees the complete value they can derive from working with your organization.

Career Advancement
An essential component of a compelling EVP is the commitment to career progression. Beyond compensation, employees seek opportunities to grow and advance in their careers within your organization. Thus, it is important to provide learning and development opportunities, mentorship programs, and a transparent framework for promotion or career growth. Even if your compensation package is not the most competitive, a well-defined career progression path can set you apart in the job market, attracting talent with ambitious career aspirations.

Company Culture
A positive company culture and shared values significantly contribute to employee retention. Your organization should be a place where employees feel appreciated, respected, and secure. A hostile work environment and toxic culture will deter employees, even if the compensation is attractive. The workplace must be supportive, inclusive, and inspiring for employees to remain engaged and loyal to your organization. A positive company culture also plays a crucial role in enhancing your employer brand.

Commitment to Wellbeing
Demonstrating your commitment to your employees' overall wellbeing is another central aspect of your EVP. It should facilitate a healthy work-life balance, boost job satisfaction, and nurture a sense of purpose and belonging among employees. An outstanding Employee Value Proposition should offer flexible work arrangements, respecting the boundary between personal and professional life. Like compensation, culture, and career prospects, flexibility is also highly valued by employees, as it allows them to lead balanced lives.

To learn how to build a standout employee value proposition (evp), continue reading here

Pro tip: Streamline your efforts in the Compensation & Benefits aspect of your EVP with the help of an Employee Benefits Platform like Motherboard
With Motherboard, you empower your employees by allowing them to choose and customize their employee benefits. This not only ensures that the benefits provided are genuinely appreciated and used, but it also helps you save money by avoiding unused benefits.