The change in the earnings threshold was issued in terms of Government Notice 531 in Government Gazette 37795 of 1 July 2014 and provides that the term “Earnings” includes regular annual remuneration before deductions, but excludes subsistence and transport allowances received, achievement awards and payments for overtime worked.
The increase in the earnings threshold came into effect on 1 July 2014.
The consequence is that employees earning less than R205 433.30 per annum on or after 1 July 2014 are entitled to the minimum conditions of employment relating to:
- ordinary hours of work;
- overtime;
- compressed working week;
- averaging of hours of work;
- meal intervals;
- daily and weekly rest periods; and
- compensation for work performed on Sundays, at night or on public holidays.
The earnings threshold is also significant in that a number of the proposed amendments to the Labour Relations Act only apply to employees who earn on or below the earnings threshold, such as the proposed new section 198B which provides additional protection against dismissal for all employees employed on fixed term contracts.