Collective Bargaining Agreement: National Employment Council for Municipals and Allied Institutions: Levy Deduction Agreement, 2026

A 2% levy is now payable for every employee in the municipals and allied institutions undertaking. It is calculated on gross earnings inclusive of all allowances, not on basic pay, and it runs from the date an employer joins the National Employment Council.

Who actually bears the 2% is not clearly drafted. The agreement says there "shall be a levy deduction of 2% per employee, with the employer paying the same for every employee" — which can be read as a deduction from the employee's wage, as a charge borne by the employer, or as 2% from each side. Employers should get a Council ruling before setting up the payroll deduction.

Remittance is due within the period prescribed by Council resolution, which the agreement does not state — so the deadline has to be obtained from the NEC directly. Failure to deduct and remit is a breach of a registered collective bargaining agreement and attracts enforcement under the Labour Act.

The scope is broad: every city, municipality, town, urban council, local board and any business entity wholly or partly owned by them and admitted to the Council, covering permanent, contract, fixed-term, seasonal and probationary employees alike.

The agreement takes effect on its registration date of 28 January 2026, was signed on 1 March 2026 and gazetted on 15 May 2026 — so employers are picking up an obligation that has been running for several months.