The NMWA aims to advance economic development and social justice by protecting workers from being paid unreasonably low wages. The Act applies to all workers and their employers except members of the National Defence Force, the National Intelligence Agency and the South African Secret Service. Every employer may not pay wages that are below the minimum wage, and the national minimum wage cannot be reduced by contract, except if the contract provides for a more favourable wage.
The NMWA requires an annual review of the rates based on inflation, the cost of living, the need to retain the value of the minimum wage, wage levels and collective bargaining outcomes and productivity.
Currently, as of 1 March 2021, the prescribed minimum wage is R21.69 per hour.
Other minimum wages prescribed by the Act are the following:
- R21.69 per hour for farm workers,
- R19.09 per hour for domestic workers,
- R11.93 per hour for employees on an expanded public works programme.
The Act also provides for minimum wages relating to employees who are part of a learnership programme. However, the minimum wage is determined per week and depends on the learner’s number of credits already earned.
The prescribed minimum wages do not include benefits, such as transport, tools, meals, accommodation allowances, etc. unless the minister determines that such benefits may be included for a specific group of workers.
An employer cannot reduce an employee’s salary to align with the new national minimum wage.
If an employment agreement already exists between an employer and employee which provides for a salary higher than the prescribed minimum wage, the employer cannot unilaterally reduce this.
Should the employment contract provide for less than the prescribed minimum wage, the employer must increase the employee’s salary to align with the minimum wage.
It is an unfair labour practice for an employer to unilaterally alter hours of work or other conditions of employment in implementing the national minimum wage.
Disputes regarding the non-compliance of the NMWA can be referred to the CCMA under section 73A of the Basic Conditions of Employment Act. Should an employee earn more than the current annual threshold of R211 596,30, the CCMA will not have jurisdiction to adjudicate the dispute.
The dispute will firstly go through conciliation, and if it cannot be resolved, the Arbitration will commence immediately.
A dispute regarding minimum wages can also be referred to the Department of Labour. Department of Labour Inspectors may obtain a written undertaking from employers to pay the minimum wage or issue compliance orders for non-compliance. Both the compliance orders and written undertakings may be made into arbitration awards by the CCMA. If the award is not complied with, on application, the CCMA may certify the award, and it may be enforced as if it were an order of the Labour Court.
Even though the CCMA and Department of Labour may attend to disputes regarding failure to comply with the prescribed minimum wage, an aggrieved employee can only refer it to one of these institutions and not to both.
An employer may be issued with a fine if an employee is paid less than the prescribed minimum wage.
This fine may be either one of the following (whichever is the higher amount):
- Twice the value of the amount the employee is paid below the prescribed minimum wage.
- Twice the employee’s monthly wage.
Employers are urged to seek advice from CEO for assistance in this regard.
Article by: Anesta Kruger
Dispute Resolution Official – Durban