Ethiopia
No private sector National Minimum Wage — Wage Board Framework remains inactivated
Impact date: Ongoing; no change during the December 2025 – February 2026 reporting period. The Wage Board remains un-constituted.
As of 28 February 2026, Ethiopia continues to have no legislated national minimum wage for private sector workers. Labour Proclamation No. 1156/2019 (the primary private sector labour law, in force since September 2019) mandates the establishment of a tripartite Wage Board, comprising representatives of the government, employers, and trade unions, to periodically determine and revise minimum wages based on economic conditions. However, as of the reporting period, the Council of Ministers Regulation required to establish the Wage Board's powers and procedures had not been issued. The public sector minimum wage of ETB 420 per month (unchanged since 2012) remains the only statutory floor — now rendered effectively symbolic given the September 2025 civil service salary revision. CETU has publicly pressed for an immediate private sector minimum wage, with a proposed floor of ETB 8,300 per month. Parliament rejected proposals to exempt workers earning up to ETB 8,300 from income tax during the 2025 income tax reform process.
Employer implications/action needed Employers should monitor regulatory developments closely, as the eventual issuance of the Council of Ministers Regulation to activate the Wage Board could occur at any time.
Employers, particularly in sectors such as textiles, garments, agriculture, and domestic services where wages are low should:
- begin internal modelling of the cost impact of a minimum wage at various levels (ETB 3,000–8,300 range)
- review collective agreements and employment contracts for clauses that may be affected
- engage sector employer associations to participate in any forthcoming tripartite consultations
- consider proactive wage reviews to reduce the risk of regulatory disruption if and when a statutory floor is introduced
Employer risk Once the Wage Board Regulation is issued, the risk of rapid implementation with limited transition time is significant. Employers in low-wage sectors who have not modelled the impact may face sudden and material cost increases. Continued inaction on wages creates a litigation and reputational exposure risk, particularly for employers with international investor scrutiny over labour standards.
Link Labour Proclamation No. 1156/2019: https://justice.gov.et/en/law/labour-proclamation/
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