The National Minimum Wage (NMW) of R20.00 per hour / R3500.00 per month is effective from 01 January 2019.

In terms of the National Minimum Wage Act, every worker is entitled to payment of a wage in an amount no less than the NMW and every employer must pay wages to its workers that is no less than the NMW.

Domestic Workers must be paid at a rate of R15.00 per hour (as of 1 January 2019), despite the recent increase in December 2018, and Farm and Forestry Workers at R18.00 per hour.  The rate/hour must be paid as indicated above, irrespective of hours worked by employees, except for overtime which will have to be paid accordingly.

Employers should take note of the following in this regard:

1. The NMW is enforceable by law and as such the Department of Labour will conduct inspections in order to monitor compliance by employers;
2. The payment of a national minimum wage cannot be waived and the NMW takes precedence over any contrary provision in any contract, collective agreement, sectoral determination or law, except a law amending the National Minimum Wage Act;
3. The calculation of wages in terms of the NMW is the amount payable in money for ordinary hours of work, and may not include payment of allowances (such as transport, tools, food or accommodation) payments in kind (board or lodging), tips, bonuses and gifts;
4. It is an unfair labour practice for an employer to unilaterally alter wages, hours of work or other conditions of employment in connection with the implementation of the NMW, except if it is more favourable to the employee;
5. The National Minimum Wage Commission will review the NMW annually and make recommendations to the Minister on any adjustment of the NMW;
6. The impact of the NMW will differ from industry to industry and employer to employer, and we would therefore like to give some tips on how to deal with this:

• As employees are not allowed to work less than 4 hours per day, this would be the absolute minimum hours that will have to be paid to employees;
• Normal working hours (before overtime) are 45 hours per week or 195 hours per month;
• Employers who cannot afford to comply with the NMW may apply for exemption from it, but exemptions will be regulated by the procedure for exemption, the obligation on an employer to consult with employees or their trade unions, the criteria for evaluating exemptions, and documents to be submitted among other factors. If an exemption is granted, it must specify the period for which it is granted, which may not be longer than one year, must specify the wage that the employer is required to pay its workers and may contain any other relevant condition;
• The only remedy available for employers who cannot afford the NMW, excluding those granted exemption, would be to either consider retrenchment or to implement short time. In both instances, employers should take note that there are processes to follow in terms of Labour legislation.

Should you require more information or assistance regarding the above, please feel free to contact us.