The South African labour market is characterised by high levels of inequality, unemployment and poverty. Due to such a characterisation, the South African National Minimum Wage (NMW) will be introduced as one of the measures to reduce these levels.
The implementation of a NMW is drawing closer. The official bill has recently been adopted by the Select Committee on Economic Development.
The NMW bill was initially proposed for implementation on 1 May 2018, but after opposition from political parties, unions and civil rights groups, the amendment was postponed. After numerous postponements and regulatory stumbling blocks, the NMW is one step away from becoming law.
The NMW will apply to all workers, that is, any person who works for another person and who receives or is entitled to receive any payment for that work. Employers may not pay wages that are below the minimum wage.
The NMW will take precedence over a contract of employment, collective agreement, or sectoral determination and it will constitute a term of the worker’s contract of employment except where the contract of employment or collective agreement provides for a more favourable wage.
It will be considered an unfair labour practice for an employer to unilaterally alter an employee’s hours of work or other conditions of employment in implementing the NMW.
The minimum wage will be R20 per hour, with a guaranteed four (4) working hours per day.
According to the National Minimum Wage Bill, the farm/forestry sector’s minimum wage is R18 an hour, which is 90% of the set minimum wage.
The domestic sector will get 75%, which amounts to R15, EPWP workers will get 55%, which is R11, whereas the wage for learnership agreements is set out in Schedule 2 of the National Minimum Wage Bill.
These amounts will, however, be adjusted within two years of the bill being officially implemented, a process which is likely to draw as much discussion as the bill itself.
The NMW is the amount payable for the ordinary hours of work. This means that a worker is entitled to receive the minimum wage for the number of hours worked in a day, taking the guaranteed 4 hours into consideration. It does not include payment of allowances (such as transport, tools, food, or accommodation), payments in kind (board or lodging), tips, bonuses and gifts.
Employers who are unable to afford the prescribed minimum wage will be able to apply for an exemption, by using an online tool. The new system will require the employers’ financial information, household income, commercial balance sheet, working hours and motivation.
After a thorough audit of the company, the department will then determine the granting or rejection of an exemption.
The exemption exercise is to be regulated by a regulation. The regulation will include the procedure for an exemption, the obligation on an employer to consult with employees or their trade unions and the criteria for evaluating exemptions.
Employers are encouraged to prepare themselves to be able to afford the prescribed minimum wage and if they are unable to afford the prescribed wage to start the exemption process as soon as is reasonably possible.
Dispute Resolution Official – PE