On 08 February 2021, the Minister of Employment and Labour published increases to the earnings threshold in the Basic Conditions of Employment Act (BCEA) and the minimum wage in terms of the National Minimum Wage Act 9 of 2018 (NMWA).
BCEA Earnings Threshold Section 6 (3) of the BCEA prescribes an earnings threshold above which the conditions as set out in chapter two of the BCEA, will not apply.
This threshold has been increased to R 211 596.30 per annum or R 17 633.02 per month.
This increased will be effective from 1 March 2021.
Minimum Wage Increase The NMWA has been amended with effect from 1 March 2021.
A short history of the NMWA:
The NMWA was first introduced in 2018 with a minimum wage of R 20.00 per hour, except for certain categories of employees, notable farmworkers and domestic workers.
Two years later, the minimum wage was increased to R 20.76 per hour, again excluding farmworkers and domestic workers from the full benefits of the NMWA. Farmworkers then being entitled to a minimum wage of R18.68 per hour and domestic workers R 15.57 per hour.
The situation with effect 1 March 2021.
This latest amendment of the NMWA increases the minimum wage to R 21.69 per hour, and importantly, no longer excludes farmworkers from the NMWA and continues to close the gap with regards to domestic workers, with domestic workers now being entitled to a minimum wage of R 19.09 per hour.
It appears that the exclusion from the NMWA for domestic workers will in all likelihood also fall away as soon as 2022.
Exemption From The NMWA
In terms of Section 15 of the NMWA employers may apply for an exemption from the national minimum wage. Employers would need to prove:
- The employer cannot afford to pay the minimum wage; and
- Meaningful consultation has taken place with every representative trade union, or with the employees themselves, in the absence of a trade union.
Please note that these exemptions are not readily approved.
About The Author:
Otto Bronkhorst is the National Manager for Labour at SEESA. He was admitted as an attorney in September 1991 and has 19 years of experience in Labour Law.
Resources:
Basic Conditions of Employment Act
National Minimum Wage Act 9 of 2018