The monetary cost of complying with employment regulations: The experience from the hotel industry

This Policy Brief highlights the associated monetary cost of complying with employment regulations: The experience from the hotel industry in Tanzania.

As stated by the International Finance Corporation (IFC) and World Bank (2012), if compliance costs are high in a country, policymakers need to know which regulatory regimes cause most of the burden to businesses and should therefore pinpoint areas for reform.

Findings from the Regulatory Impact Assessment (RIA) lead to our four key reform recommendations:

1. Regulations need to permit shift working hours to minimise business exposure to overtime-related costs.
2. The need to exempt tourism sector from the regulation on 12 months employment period.
3. The need to set the hours of work for security guards different from that of the other employees.
4. The need to allow employers to give off days in lieu of the public holidays that the employee worked.

The proposed reforms are reasonable and offer a balanced approach. They are in line with the seasonality nature of the tourism business whilst at the same time do not negatively affect the welfare of employees. In other words, if such reforms are implemented, the Government will be meeting its several developmental objectives, including advancing the business environment and protecting workers’ rights.

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