NATIONAL MINIMUM WAGE INCREASE
A National Minimum Wage (NMW) was introduced since January 2019 in an attempt to alleviate poverty and reduce wage inequality, amongst others, and since announcing a R20.00 per hour minimum wage in 2019, the NMW has steadily been increased, and is currently at R23.19 per hour.
The NMW Commission, during December 2022, announced that it was conducting an investigation into the NMW for 2023, and was considering an increase in the range of CPI+0.5% – COU+1%.
NMW Chairperson, Professor Van Der Walt, indicated that “The target should ensure that the value of the national minimum wage does not decline relative to the median wage.”
On 21 February 2023, the Department of Employment and Labour published the new NMW, in terms of which an increase of R2.23 was announced, effective as from 1 March 2023, bringing the NMW to R25.42 for each ordinary hour worked.
The new NMW is also applicable to farm workers and domestic workers, but does not apply to allowances paid to workers in order for them to perform their duties, which includes, but is not limited to, transport and food allowances.
New minimum wages for contract cleaning, wholesale, retail and learnerships also form part of the changes that have been Gazetted and will also be effective as from 1 March 2023.
This increase in the NMW, however, exceeds expectations from business quarters, and may have far reaching effects on many employers, particularly employees who employ a substantial number of employees.
Employers are entitled to apply for exemptions from the NMW for up to a year, however, the circumstances of when an exemption may be granted are unclear at this stage, and employers who fail to pay the NMW face significant fines.
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