Sonja Vorster
The Department of Labour inspectorate has been extra busy lately with inspections and handing out compliance orders.
This is not a new thing. What has been devastating for many employers are the fines imposed and the SEVEN days in which to pay the fine.
READ MORE HERE: Labour Buzz: National Minimum Wage effective January 1, 2019
Failure to pay will result in the Director General of Labour approaching the Commission for Conciliation, Mediation & Arbitration (CCMA) to impose a further fine per employee on top of the fine that the employer already received and it will be made an arbitration award which, upon failure to pay, becomes a Labour Court order.
The fines are nothing like they were in the past.
These fines are now as follows:
The amount underpaid in total is calculated. ADDED to the underpaid amount is that the amount is doubled or the employee’s monthly average wage is doubled, whichever amount is the highest.
If the employer had a compliance prior on his history with the department, the fine is calculated as follows:
The amount underpaid in total is calculated. ADDED to the underpaid amount is that the amount is multiplied by three or the employee’s monthly average wage is multiplied by three, whichever amount is the highest.
READ: Labour Buzz: Domestic workers and gardeners
If you are an employer with a small staff of five employees and you underpaid your employees since January 2019 by paying them for example R12.50 an hour versus R20 an hour, you will be looking at a fine which will be paid out to the employees as follows:
Short payment: R12.50 versus R20 = short paid R7.50 per hour x five employees = R1462.50 x 5 = R7312.50 plus double monthly wage = R7800 x five employees = R39,000 = R46,312.50.
You will be looking at a fine for the amount of R46,312.50, payable in seven days.
Not many businesses can afford this type of money and you have no way of getting around this by asking for a warning and paying the short payment. This is not an option available to the employer.
While the National Minimum Wage of R20 received much publicity, employers must keep their eye on the Sectoral Determination for the sector they operate under, such as the Retail and Wholesale sector.
A National Minimum Wage came into effect on August 2, 2019, and employees received increases. Be warned that failure to implement these wages will effect a fine!
NOW READ: Labour Buzz: Shame on you, UIF Department of Labour
The only way to pay a lower amount rand value per hour is to apply for a temporary exemption from the National Minimum Wage online. This must be strongly motivated, as such exemptions are not granted easily.
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