By Anja van den Berg
President Cyril Ramaphosa has signed into law the National Minimum Wage Bill, which sets a historic precedent in the protection of low-earning workers.
The National Minimum Wage Act sets South Africa’s first national minimum wage (NMW) at R20 an hour, equivalent to R3 500 per month, depending on the number of hours worked, and creates a phase-in period for certain workers due to their vulnerability to disemployment.
The new minimum wage applies across all sectors, with a few exceptions, as advised by Labourwise:
The exceptions include domestic workers, farm and forestry workers and workers employed in expanded public works programmes. These exceptions will only be temporary. It is envisaged that there will be a gradual adjustment of certain wages to come in line with the NMW. As a first step these minimum wages will be as follows:
– Domestic workers: R15 per hour
– Farm/forestry workers: R18 per hour
– Workers employed on expanded public works: R11 per hour
- Immediate adjustments within certain sectors
Employers in some sectors will have to increase their minimum wages to R20 per hour with effect from 1 January 2019. These include the hospitality sector (where the current minimum for employers with less than 10 employees is R17,34 per hour) and the wholesale and retail sector (where the minimum wage for several categories workers is below R20 per hour, the lowest currently being R16,20).
For employees who work 45 hours per week, the minimum monthly wage will be just short of R3 900. If the employment contract makes provision for less than 45 hours per week, the monthly rate can be less than this amount. Employers are not permitted to unilaterally reduce hours of work or change other conditions of employment in response to the implementation of the NMW.
Employers are restricted in the way that they structure the remuneration package. The NMW excludes allowances that are paid to enable employees to work (such as transport and equipment), or payment in kind (such as board or accommodation), as well as bonuses, tips or food. So, for example, one cannot argue that you may pay employees less than R20 per hour because you contribute to their uniforms or provide meals.
Employers are not be permitted to unilaterally change working hours due to the implementation of the NMW. Any reduction of hours of work will have to be negotiated.
There is provision for employers to apply for an up to 10% reduction by means of an electronic system. The national minimum wage exemption system is publicly accessible online at https://nmw.labour.gov.za. Alternatively, employers may approach the nearest branch of the Department of Labour.
South African Government News Agency: https://www.sanews.gov.za/south-africa/national-minimum-wage-come-effect-1-january-2019
The South African: https://www.thesouthafrican.com/national-minimum-wage-south-africa-how-much/
LabourWise : https://www.labourwise.co.za/labour-news-teazer/new-national-minimum-wage-1-january-2019