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Everything you need to know about the new national minimum wage

Hammond Pole Attorneys > Labour Law  > Everything you need to know about the new national minimum wage

Everything you need to know about the new national minimum wage

minimum wage

The Minister of Employment and Labour, Thulas Nxesi announced that effective from 1 March 2022 the National Minimum Wage (“NMW”) will be increased by 6.9% compared to the previous period which had an increase of only 4.29%. This means that as from 1 March 2022, workers will earn R 23.19 instead of R21.69 for each ordinary hour of work.

To comply with the NMW, a domestic worker would have to earn a minimum daily rate of R 208.71 in comparison to the previous year where the daily minimum rate was R 195.21. In total, this equates to a monthly difference of R 270.00. Even though 6.9% sounds like a high increase, it’s important to keep in mind the NMW is a starting point for employees and employers to negotiate wages.

Another important amendment that will be affected is that unlike previous years there will no longer be exceptions to specific worker groups, like farmworkers and domestic workers, in respect of minimum wages.

The National Minimum Wage Act, No9 regulates the payable minimum wage for ordinary working hours which excludes various forms of allowances, tips, bonuses, or gifts.

The Act sets out that The National Minimum Wage Commission reviews the minimum wage annually taking factors such as inflation, cost of living, the need to maintain the value of the minimum wage,  national GDP, wage levels, and other economic factors into account.

Furthermore, it is illegal and unfair labour practice for an employer to change an employee’s working hours or other employment conditions to implement the NMW without the employee’s consent.

Amendments to the Basic Conditions of Employment Act, 75 of 1997 (“BCEA”)

Another significant announcement made by the Minister of Employment and Labour was to increase the earnings threshold from R 211 596.30 per year to R 224 080.48 per year (which is calculated to R 18 673.37 per month).

This threshold aims to protect vulnerable employees earning less than the threshold by affording full protection of every section of the BCEA and excluding employees earning above the threshold from certain sections of chapter 2 of the Basic Conditions of Employment Act.

Thus, if an employee earns less than R 18 673.37 per month, an employer is required to adhere to all sections of the BCEA to ensure a fair and feasible working environment for the employee.

Chapter 2 primarily deals with the regulation of working hours. This includes ordinary working hours*, overtime**, compressed working week, averaging of hours of work, meal intervals, daily and weekly rest periods, pay for work on Sundays, night work, and public holidays. Thus, employees earning above the threshold amount do not have a statutory right to demand minimum employment conditions in terms of the above-mentioned chapter 2.

According to the Labour Relations Act, vulnerable employees are also entitled to additional protection in connection with non-standard employment arrangements – for example contract workers or part-time employees.

* If an employee works 5 days or less a week the employee may only work 9 hours per day/Should an employee work 5 days or more a week the employee is only allowed to work 8 hours per day

** Overtime may not exceed 10 hours per week therefore an employee’s total working hours per day may not exceed 12 hours

For more information, please contact: Carla De Waal – CarlaDW@hammondpole.co.za

Carla de Waal

 

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