February 19, 2018

The National Minimum Wage

The Labour Department has been short meetings in order to introduce the National Minimum Wage (NMW). These started last November 2017 in Johannesburg. The meetings to brief workers have so far been held in Pretoria, Tzaneen and Polokwane, to mention but a few. The introduction of the NMW means that the Basic Conditions of Employment Act (BCEA) and the Labour Relations Act (LRA) now need to be amended to cover the National Minimum Wage, and this will not be an easy task to complete. In one if the meetings held, the Director for Employment Standards as the department, Mr Stephen Rathai, said that with the high levels of inequality, unemployment and poverty in our country, it is important to introduce the NMW and ensure that it covers all workers.

What if the employer cannot afford to pay the minimum wage?

The Labour Department is currently finalising the drafting of exemption regulations ahead of the approval of the national minimum wage. This covers employers who can prove that they are not able to pay the national minimum wage. And as such, the Minister of Labour will be authorised to grant exemptions from the NMW. However, this will be regulated accordingly wherein the employer who is to be exempted must consult with the employees and/or their trade unions and submit the supporting documents, among other factors to validate such exemption. The application for exemption by the employer will go through to thorough audits before it can be approved.

National Minimum Wage (NMW)

The national minimum wage is the bottom line.  No one is to earn below the minimum wage, and employers cannot change the conditions of employment without first reaching an agreement with the employees. It was agreed at National Economic Development and Labour Council (NEDLAC) that the national minimum wage be fixed at R20.00 per hour (R3,500.00 per month). This will be implemented and enforced from the 1st of May 2018. This rate will be applicable to all sectors, with the exception of sectors such as: –

Farm workers: NMW at R18.00 per hour (about R3,200.00 per month)

Domestic workers: NMW at R15.00 per hour (about R2,600.00 per month)

Workers on the Expanded Public Works Programme: NMW at R11.00 per hour (about R1,900.00 per month).

Employers and workers should take careful note that the NMW does not include payment of allowance, payment in kind, tips, bonuses and gifts.

In reality, the NMW will apply to unskilled workers who do not have any bargaining power.  Its purpose is to prevent them being exploited.  The NMW has been set at levels that should not be prohibitive for employers.  I think the NMW is a good thing, and will be a great help to the country’s workforce.

 

Koena Seanego
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