The Federal Government and private sector employers appear headed for a confrontation over plans to review the Nigeria Social Insurance Trust Fund (NSITF) employees’ compensation levy, with employers warning that any increase above the current statutory rate could threaten jobs and business survival.
The disagreement came to the fore on Tuesday in Lagos during the Safe Workplace Intervention Project (SWIP), an annual stakeholders’ forum and awards ceremony organised by the Ministry of Labour and Employment, the NSITF, and the Nigeria Employers’ Consultative Association (NECA).
Under the Employees’ Compensation Act (ECA) 2010, employers are required to contribute a minimum of one per cent of their total monthly payroll to the Employees’ Compensation Fund. The fund provides financial and medical support to workers affected by workplace injuries, occupational diseases, or death.
At the event, the Minister of State for Labour and Employment, Mrs. Nkeiruka Onyejeocha, openly advocated a review of the compensation framework, expressing concern over what she described as inadequate benefits paid to families of workers who die in the line of duty.
“A safe workplace is not optional; it is legal,” Mrs. Onyejeochasaid. “I strongly advocate that the compensation should be reviewed. When people die, their families are just given peanuts. The narratives have to change, and employers must comply with the standards.”
She added that the administration would not compromise on occupational safety and health, stressing that initiatives such as SWIP were aimed at shifting employers’ perception of workplace safety from a cost burden to an investment in people.
However, employers pushed back strongly against the proposal. Speaking on their behalf, the Director of Corporate Services at Seplat Energy Plc, Dr. Steve Ojeh, warned that increasing the levy could worsen the already harsh operating environment for businesses.
Represented by the company’s Senior Manager for Industrial Relations, Mr. Ken Okoroh, Dr. Ojeh said a higher levy could result in “potential job losses, investment challenges, expansion of payroll items, limited performance-based incentives, and factory closures”.
He cited economic pressures, efficiency gaps, the multiplicity of taxes and levies, and limited utilisation of existing benefits as major challenges facing employers. According to him, businesses in Nigeria currently contend with more than 75 different taxes and levies.
“Rather than increasing the one per cent contribution, government should consider reducing it so businesses can remain afloat and save thousands of jobs,” he said.
The Minister of Labour and Employment, Mr. Muhammadu Dingyadi, urged all parties to seek common ground, calling for stronger collaboration among organised labour, NECA, and the NSITF to improve workplace safety outcomes.
“With this, we can build the future of work that is anchored on dignity, protection, and sustainability,” Mr. Dingyadi said, while assuring stakeholders that government remains committed to enforcing safety standards.
Speaking for organised labour, the National Treasurer of the Nigeria Labour Congress (NLC), Mr. Aliyu Haruna, described the Employees’ Compensation Act 2010 as a landmark reform, but said its full potential had yet to be realised.
He attributed the gaps in implementation to low awareness, administrative inefficiencies, weak enforcement, employers’ non-compliance, and limited coverage.
“To ensure the Act fulfils its purpose, we need stronger enforcement, expanded coverage, digitised claims processes, and firm political commitment at all levels,” Mr. Haruna said. He added that strengthening the scheme would ease the socio-economic burden of workplace injuries and deaths on workers and their families.
The NSITF, a federal institution, administers the Employees’ Compensation Scheme, which provides compensation and rehabilitation for workers or their dependants in cases of workplace injury, disability, or death. The scheme is funded mainly through employer contributions.
Beyond the immediate debate over levy rates, the issue is also linked to proposed legislative reforms. The National Assembly is considering a bill to repeal the NSITF Act of 1993 and the Employees’ Compensation Act of 2010, replacing both with a unified law aimed at eliminating duplication, clarifying legal ambiguities, and strengthening Nigeria’s social protection framework.
As discussions continue, workers, employers, and government remain divided over how to balance adequate compensation for injured workers with the economic realities facing businesses.
