There are two recent developments which employers should take note of.
First, on 9 February 2022, the Minister of Employment and Labour published his determination of a new earnings threshold under the Basic Conditions of Employment Act, 1997.
Secondly, on 21 February 2023, the Minister published an amendment to the national minimum wages contained in Schedule 1 and Schedule 2 of the National Minimum Wage Act, 2018.
Both determinations will be effective from 1 March 2023.
The new BCEA threshold
With effect from 1 March 2023, the BCEA threshold will increase from the current R224 080. 48 pa (equivalent to R18 673. 37 per month) to R241 110. 59 pa (equivalent to R20 092. 55 per month).
In practice this means that employers should review the position of people earning between R18 673. 37 per month but less than R20 092. 55 per month. These are the people new “into the net”.
Do their employment conditions meet the minimum standards of the BCEA? Do their rights and protections under the LRA change?
For employees earning less than the threshold, the BCEA regulates the position of ordinary hours of work, overtime, compressed working weeks, 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 threshold also has relevance under the LRA in connection with labour broker employees, fixed term contracts and part-time employees.
The threshold is based on the regular annual remuneration of an employee before deductions such as, for example, income tax, pension, medical aid and similar payments or contributions by the employee. Employer contributions made in respect of the employee are not included in the calculation of remuneration for this purpose, nor are subsistence and transport allowances, achievement awards and payments for overtime.
The national minimum wage for 2023
The 21 February 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.
With effect from 1 March 2023, the national minimum wage for all workers will be R25. 42 for each ordinary hour worked. This is equivalent to R4 182. 61 for a person working a 38 hour week; and to R4 953. 09 per month for a person working a 45 hour week.
There is no longer any difference between the minimum wages for general workers, farm workers or domestic 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 different and 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.