THE NEW EARNINGS THRESHOLD AND NEW NATIONAL MINIMUM WAGE (NMW) FOR SOUTH AFRICA
On Monday, 8 February 2021, the Labour Minister, Thulas Nxesi, published a gazette detailing the NMW for South Africa, which will come into effect as from 1 March 2021.
This means that for each ordinary hour worked, a general worker must earn a minimum wage of R21.69 per hour, which does not include payment of allowances such as transport, tools, food and/or accommodation etc.
The gazette further sets out increases in various Sectoral Determinations, as well as an increase in the earnings threshold, and provides for exceptions for certain groups of workers, such as farm workers and domestic workers, as summarized in the table below.
Submissions were made by business representatives that the majority of the increases would further damage the already ailing economy and employment prospects, for example, the increase in the NMW equates to an increase of around R350.00 per month for a farm worker, and around R450.00 per month for a domestic worker.
During November 2020, the NMW commission stated that it would ideally like to implement the NMW across the country, in all sectors, however, in an attempt to avoid unnecessary disruption, the commission indicated that the process would be a gradual one, with equalization to the NMW over time.
The increase does come at a difficult time for employers and employees alike, as the population struggles to recover from the negative impact of COVID-19.
The NMW is briefly summarized as follows:
|NEW RATE||PERCENTAGE INCREASE||IMPACT|
|Earnings Threshold||R205 433.00 P/A||R211 596.30 P/A||3% (R6163.00)||Chapter 2 of the BCEA, and certain provisions in the LRA relating to equal treatment|
|NMW – General||R20.76 per hour||R21.69 per hour||4.5% (R0.93)|
|NMW – Farm Workers||R18.68 per hour||R21.69 per hour||16% (R3.01)|
|NMW – Domestic Workers||R15.57 per hour||R19.09 per hour||22.6% (R3.52)|
|Sectoral Determination||4.5%||Contract Cleaning, Wholesale, Retail etc.|
Should you have any further queries regarding the NMW, kindly contact our offices.