UP, UP AND WAY: AN INCREASE IN THE NATIONAL MINIMUM WAGE FOR 2023

• South Africa

• Employment law
• HR Consultancy

22-02-2023

Shortly after informing our readers of the upward adjustment to the earnings threshold in terms of section 6(3) of the Basic Conditions of Employment Act, 75 of 1997 (“BCEA”), the Minister of Employment and Labour announced amendments to the National Minimum Wage Act, 9 of 2018 (“NMWA”). In terms of the amendments, employers and employees will see an upward adjustment to the national minimum wage that will take effect from 1 March 2023.

The national minimum wages apply to those employees who earn below the earnings threshold, which, as we reported yesterday, shall increase to R241 110.59 per annum with effect from 1 March 2023.

What are the new national minimum wages?

The national minimum wage for each ordinary hour worked is now R25,42, an increase of 9,6% from R23,19. This increase, however, does come with its exceptions in certain sectors. This year, from 1 March 2023, specific categories of workers shall benefit from the increase to the national minimum wage, being domestic workers and farmworkers who are entitled to R25,42 per ordinary hour of work.

Workers employed on expanded public works programmes are entitled to a minimum wage of R13,97 per hour. Workers who have concluded a learnership agreement as stipulated in section 17 of the Skills Development Act, 97 of 1998, are entitled to allowances as contained in the amended schedule 2 of the NMWA.

The amendments to the NMWA also make provision for increases in minimum rates in both the Wholesale and Retail Sectors, dependant on the job category as well as the Contract Cleaning Sector, which vary between the metropolitan and certain rural areas. Employers are encouraged to review the Sectoral Determination tables to ensure full compliance with the increases set out therein.

What happens if an employer does not implement these changes?

Should employers fail to comply with their obligations in terms of the NMWA, it could result in the employer concerned being (i) issued a compliance order by a Department of Labour inspector and (ii) fined as set out in the BCEA.

The BCEA stipulates that employers who fail to pay their employees the increased hourly wages may well be ordered to pay the worker either twice (i) the value of the underpayment or (ii) the employee’s monthly wage, whichever amount is the greater. The BCEA does not stop there. Should there be further contraventions by employers to pay the national minimum wage to their employees, the fine can be increased threefold in accordance with the aforementioned calculation of the penalty.

Employers and employees should seek and obtain legal advice should they have any queries in respect of the new national minimum wage.