Ina Opperman
Business Journalist
3 minute read
8 Dec 2020
4:09 pm

Give your two cents about the minimum wage

Ina Opperman

It is time again for the annual minimum wage review and South Africans have time until 29 December to comment on the proposed increase for general, domestic and farm workers.

This is in line with the requirements of the National Minimum Wage Act to establish a more equitable pay structure that ensures working people do not live in poverty.

The National Minimum Wage Commission is calling on interested people to give written representations on the annual review and adjustment of the national minimum wage for 2021.

The National Minimum Wage Act of 2018 requires that the commission review the minimum wage annually and recommend any adjustment to the minister of employment and labour and also reflect alternative views, including those of the public.

The majority of commissioners recommended that the minimum wage should be increased by 1.5% over and above inflation, as measured by the consumer price index (CPI). The inflation rate, measured by the CPI in September 2020, was 3% and therefore the commission proposed an adjustment of 4.5%.

The commission said in a statement that it believed the adjustment of 1.5% above the inflation rate was in line with collective bargaining outcomes for 2019-2020. The majority of commissioners also recommended that the minimum wage for farmworkers be aligned with the national minimum wage in 2021, while the minimum for domestic workers should be gradually increased to equal the national minimum wage by 2022.

ALSO READ: SA’s GDP grows by 13.5% in third quarter of 2020

Commission’s targets

According to a statement, the commission was considering setting three-year targets for the national minimum wage in order to reach the aims of the Act, but this objective had not yet been considered.

The commission consider the following factors to decide on the adjustment:

  • Inflation
  • the cost of living
  • the need to retain the value of the minimum wage
  • gross domestic product
  • wage levels and collective bargaining outcomes
  • productivity
  • ability of employers to carry on their businesses successfully
  • the operation of small, medium or micro-enterprises and new enterprises
  • the likely impact of the recommendation adjustment on employment or the creation of employment.

While the commissioners believed that the downturn brought on by the pandemic was due to unique circumstances and the implication for the national minimum wage difficult to anticipate, the commission says a modest real increase seems unlikely to aggravate the downturn. It could actually assist by working in tandem with other measures to stimulate the economy.

READ MORE: Why living wages should be a priority during Covid-19

President Cyril Ramaphosa proclaimed the Act in 2018, setting a historic precedent in protecting low-earning, vulnerable workers in South Africa. The Act also provides a platform for reducing inequality and huge disparities in income in the national labour market. The national minimum wage was expected to benefit 6.6 million workers when it was implemented last year on 1 January at a level of R20 per hour.

The minimum wage base was adjusted on 1 March this year to R20.76 per hour and no workers can be paid less. When implementing the minimum wage, it is considered it unfair labour practice for employers to unilaterally change hours of work or other conditions of employment.

The minimum wage is the amount employees must be paid for ordinary hours of work. It does not include payment of allowances, such as transport, tools, food or accommodation. Payments in kind, such as payment for board and lodging, tips, bonuses and gifts are also excluded.

The Act also provides for exemptions for employers who truly cannot afford the adjustment.

According to the National Employers Association of South Africa (NEASA), the new minimum monthly wages, for a 45-hour work week, will be as follows if the proposal is accepted:

  • General wage: R4227 per month (an increase of R182.00 per month)
  • Farmworkers: R4227 per month (an increase of R588.00 per month)
  • Domestic workers: R3719 per month (an increase of R686.00 per month).

Written representations on the adjustments of the national minimum wage should be sent to: The Directorate of National Minimum Wage Policy and Basic Conditions of Employment Act (BCEA) Administration, Department of Employment and Labour, Private Bag X117, Pretoria, 0001. You can also submit your comments by email to Unathi.Ramabulana@labour.gov.za.

For more news your way, download The Citizen’s app for iOS and Android.