What the current National Minimum Wage is in South Africa, the purpose of the act, and the considerations taken when determining the minimum wage.
The South African labour sphere ensures that working South Africans are provided with a National Minimum Wage as a way of promoting a fair and equal labour market. Members of the labour force are entitled to a certain rate for each ordinary hour they work.
Different worker groups are allocated a certain minimum wage per hour of work and employers must ensure they pay their workers accordingly for the set hours they work. The wage is adjusted annually and is announced by the Minister of the Department of Employment and Labour.
National Minimum Wage
The National Minimum Wage Commission was established by section 8 of the National Minimum Wages Act 9 of 2018 which first came into effect on 1 January 2019. Groups of workers in various sectors earn a minimum wage for each hour they work.
The Wages Act was developed as a means of acknowledging and redressing the fact that South Africa was regarded one of the most unequal societies in the world and had vast income gaps and inequalities when it came to the national labour market. It was also intended to help eradicate poverty and inequality and to cultivate fairness.
What is the minimum wage in South Africa?
The National Minimum Wage is adjusted annually and the different wages for specific worker groups are announced by the Minister of Employment and Labour. The most recent announcement by Employment and Labour Minister, Thulas Nxesi, contained an increase in the 2022 National Minimum Wage from R21.69 to R23.19 which has been in effect from 1 March 2022.
The adjustments provided exceptions for several worker groups including farm workers, domestic workers, workers employed on expanded public works programmes, as well as for workers who have concluded learnership agreements in terms of the Skills Development Act. Employers are legally required to pay their workers according to the requirements of the NMW, and not make any changes. The NMW excludes payment of allowances such as transportation, tools, food or lodging, tips, workers bonuses, and workers gifts.
What are the adjusted exceptions for worker groups?
According to the announced adjustments, farm workers and domestic workers are entitled to a minimum wage of R23.19 per hour worked. Workers employed on an expanded public works programme are entitled to a minimum wage of R12.75 per hour.
Moreover, workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act are entitled to allowances contained in schedule 2 of the learnership allowances based on the national qualification’s framework level, and the credits earned by the learner.
What factors does the act consider when determining adjustments?
The National Minimum Wage must be adjusted every year and announced by the Minister of Employment and Labour for the new financial year. The National Minimum Wage Commission needs to consider certain factors when making their decision.
The commission considers the rate of inflation, the cost of living, and the needs to preserve the value of the minimum wage; gross domestic product; wage levels and collective bargaining outcomes; productivity; the employer’s ability to run their business successfully; the operation of small, medium and micro-enterprises, and the impact on employment and employment creation.
Considerations in determining the National Minimum Wage
- Cost of living
- Gross domestic product (GDP)
- Wage levels
- Collective bargaining
- Employer’s ability to successfully run their business
- Operation of SMMEs
- Employment and employment creation
What is the purpose of the NWM Act?
Finally, it can be quite beneficial to understand what the purpose of the NMW Act is. The main purpose of the act is to increase economic development and social justice by improving the wages of some of the least-paid workers in South Africa, it seeks to protect workers from unreasonably low wages, and preserves the value of the National Minimum Wage.
The act endeavours to promote collective bargaining and supports economic policy. It also applies to all companies and their employers except SANDF, National Intelligence, and the South African Secret Service.
Every worker in South Africa, with the exception of certain specified worker groups, are entitled to a National Minimum Wage for their labour for each hour they are allocated to work. This is in terms of the National Minimum Wage Act set out for the advancement of economic development in South Africa.
As of March 2022, the National Minimum Wage increased to R23.19 per hour while workers employed on expanded public works programmes are entitled to R12.75 per hour, and workers who have concluded learnership agreements are entitled to allowances contained in schedule 2 of the act.