NEW EARNINGS THRESHOLD: 1 MARCH 2023
The Minister of Employment and Labour is empowered, in terms of the Basic Conditions of Employment Act (“BCEA”), to make determinations regarding the earnings threshold.
This grants employees who earn below the threshold protections under the BCEA in terms of the regulating of working hours, overtime and meal intervals etc., as well as certain protections under the LRA, such as the provisions relating to fixed term contracts, etc.
Effective as from 1 March 2023, the Department of Employment and Labour has announced that it will increase the earnings threshold from R224 080.48 per annum (R18 673.37 per month) to R241 110.59 per annum (R20 092.55 per month).
Earnings is defined as the normal annual remuneration prior to any deductions, such as tax, pension, medical aid and similar payments. The definition of earnings excludes contributions made by the employer in respect of the employee, subject thereto that subsistence and transport allowances, achievement awards and overtime payment shall not be regarded as remuneration for the purposes of the announcement.
It must be noted, however, that employees who earn in excess of the earnings threshold are exempt from the application of several sections of the BCEA.
This does not mean that employees who earn in excess of the earnings threshold are not entitled to any of the provisions of the BCEA, and more often than not, these provisions, such as working hours, overtime and annual leave, however not limited thereto, are addressed in the contracts of employment of these employees.
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