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National Minimum Wages

On the 8th February 2022 the Minister of Employment and Labour, Thembelani Nxesi amended the national minimum wages contained in Schedule 1 and Schedule 2 of the National Wage Act and these changes come into effect on the 1st March 2022.

So, what does this mean?

  • Farmworkers are entitled to a minimum wage of R23,19 per hour
  • Domestic Workers are entitled to a minimum wage of R23,19 per hour
  • Workers that are employed on expanded public work programs are entitled to a minimum wage of R12,95 per hour

Sectoral determinations have also been made for the contract cleaning sector as well as the wholesale and retail sector. Employers in these sectors will be required to increase their minimum wages as well.

In addition, workers who have concluded learnership agreements are entitled to certain allowances as outlined in a Schedule in the Government Gazette.

Employers may apply for an exemption online or at their nearest branch of the Department of Employment and Labour.

Earnings Threshold

The Minister also announced that the “earnings threshold” has increased from R 211,596.30 per annum (R 17,633.00 per month) to R 244,080.48 (R 18,673.37 per month) in a notice posted on the 9th February 2022. “Earnings“ are defined as the employee’s regular remuneration before deductions (tax, pension, medical aid etc.), but excludes benefits such as subsistence and transport allowances, medical aid allowances, achievement awards, and overtime worked.

Employees who earn above the threshold are excluded from certain provisions in labour law, for example:

Basic Conditions of Employment Act 75 of 1977 (“BCEA”):

Employees are excluded from the provisions regulating certain basic conditions, such as ordinary hours of work, overtime, daily and weekly rest periods. These conditions can still be negotiated to be in line with the law. Although employers are not forced to provide for these basic conditions, they are still obliged to be reasonable and fair in their dealings with these employees and their working hours.

Labour Relations Act 66 of 1995 (“LRA”):

Certain provisions dealing with labour brokers and fixed-term employees will not apply if those employees earn more than the threshold. For example, fixed-term contracts cannot be longer than three months if the employee earns below the threshold.

Employment Equity Act 55 of 1998 (“EEA”):

In disputes about unfair discrimination, it can only go for arbitration at the Commission for Conciliation, Mediation and Arbitration (“CCMA”) if the employee earns below the threshold, if it relates to sexual discrimination or if all the parties’ consent to the arbitration.

Be aware that the change in the threshold may mean that some employees who were above the threshold and did not benefit from the provisions, now fall within the threshold and may be entitled to additional protections, such as overtime payment when working more than 45 hours per week, compulsory breaks and rest periods, night work allowances etc.

Keeping up with the constantly changing legislation can be an onerous task. As payroll and HR specialists, it is incumbent on LSPInc. to ensure that we are ahead of the curve and well prepared for changes to ensure that our clients are legally compliant.