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Amendment to the National Minimum Wage

Fasken
Reading Time 3 minute read
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Overview

On 8 February 2021, the Minister of Employment and Labour published an amendment to the national minimum wages contained in Schedule 1 and Schedule 2 of the National Minimum Wage Act, 2018, effective from 1 March 2021. This follows the recommendations contained in the Commissioner’s report on the annual review of the national minimum wage for 2021 which was published for comment on 20 November 2020.

The determination by the Minister deals with the adjustment to the national minimum wage and so affects workers earning at the level of the national minimum wage.  It does not prescribe an increase for workers earning more than the national minimum wage.

Below is a table setting out the amendments to the national minimum wage and the new minimum wages for 2021.  The figures are for the Johannesburg/Gauteng areas.

 

Minimum wage per hour (Johannesburg/Gauteng areas)

2020

2021 with effect from 1 March 2021

General

R20,76

R21,69

Farm Workers

R18,68

R21,69

Domestic Workers

R15,57

R19,09

 

The general national minimum wage has been increased by 4,5% while the percentage increase for domestic workers and farm workers is rather larger than that.

In 2020, the minimum wage of farm workers was 90% of the national minimum wage.  The minimum wage of farm workers has been equalized with the national minimum wage for 2021, resulting in an increase of 16%.  In 2020, the minimum wage of domestic workers was 75% of the national minimum wage and has, in 2021, been increased to 88% of the national minimum wage, resulting in a 22,6% increase. 

The proposal of the majority in the Commissioner’s November report estimated that the adjustment of the minimum wage for domestic workers and farmworkers would amount to an increase of about R450,00 per month for a domestic worker and about R350,00 per month for a farmworker.  It is not clear on how many hours in a month these estimates were based.  In our calculations, for a domestic worker working a 45 hour week, the increase would amount to R550,00 per month while that for farm workers, also working a 45 hour week, the increase would be just less than R590,00 per month. 

According to the Commissioner’s report, it is anticipated that the minimum wage for domestic workers will be increased to 100% of the national minimum wage in 2022.  However, as it currently stands, domestic workers on the minimum wage will still earn 12% less than other minimum wage workers.

The published determination also deals with learnership allowances, the Contract Cleaning Sector and the Wholesale and Retail Sector.  The sectoral determinations for these sectors are adjusted as well.

It is important that employers familiarize themselves with the amendments to the national minimum wage and ensure compliance with the amended figures.

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