Important increases to the national minimum wage

The media has been reporting on a new minimum earnings threshold for employees. This article briefly summarises the new earnings threshold's main impact on employees and employers.

The Minister of Employment and Labour promulgated two significant changes to the earnings of employees that took effect from 1 March 2023 through the increase of the national minimum wage by 9,62% and the increase to the earnings threshold from R224 080.48 to R241 110.59 per annum.

About the latter issue, an increase to the earnings threshold means that all employees earning R241 110.59 per annum, or approximately R20 092.55 per month and above, will be excluded from the application and/or automatic protection of several provisions of the Basic Conditions of Employment Act 75 of 1997 (“BCEA”). Employees earning above this threshold are not automatically entitled to payment for overtime or weekends off as prescribed by the BCEA. Moreover, the earnings threshold also has an impact on the application of various provisions in the Labour Relations Act 66 of 1995, the Employment Equity Act 55 of 1998, the National Minimum Wage Act 9 of 2018 and the CCMA Rules.

With the increase of the national minimum wage to R25.42 per hour for all domestic and farm workers, employers will now be required to pay domestic workers and/or farmworkers just over R4 000.00 if they tender their service for 5 days per week and work for 8 hours per day for 20 days a month. The increase in the national minimum wage shall not apply to employees employed on an expanded public works programme and workers who have concluded learnership agreements in terms of section 17 of the Skills Development Act 97 of 1998.

A failure to pay employees in accordance with the rates prescribed by the National Minimum Wage Act may result in a dispute for monies owing and/or a compliance order which may be issued in terms of the provisions of the BCEA. These disputes or claims may be referred to the Commission for Conciliation, Mediation and Arbitration for conciliation and arbitration.

Disclaimer: This article is the personal opinion/view of the author(s) and is not necessarily that of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever and no action should be taken on the basis thereof unless its application and accuracy have been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken on the basis of this content without further written confirmation by the author(s).

April 24, 2023

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