New South African national minimum wage and earnings threshold

New earnings threshold

The “earnings threshold” has been increased for the first time since July 2014. Previously the earnings threshold was R205 433.30. As of March 1, 2021, the new earnings threshold will be R211 596.30 per year (approximately R17 633.00 per month).

“Earnings” includes the employee’s regular annual remuneration before deductions but excludes benefits such as subsistence and transport allowances, achievement awards and payments for overtime worked. Employees who earn more than the earnings threshold per annum are excluded from the protection of sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) of the Basic Conditions of Employment Act, 1997.

The increase in the threshold will mean that from March 1, some employees who earn more than R205 433.30 but less than R211 596 per year may be entitled to additional protections that they were not previously enjoyed, such as payment for overtime, compulsory breaks and rest periods, night work allowances and the like.

Increases in the national minimum wage

The Minister of Employment and Labour Thulas Nxesi has also published increases in the National Minimum Wage and various sectoral determinations. These increases are also effective from March 1.

The national minimum wage will change from R20.76 per hour to R21.69 for each ordinary hour that an employee works. This is an increase of approximately 4.9 per cent. All sectors will be subject to the new national minimum wage, save for a few exceptions, including:

• Farm workers, who are entitled to R21.69 per hour;
• Domestic workers, who are entitled to R19.09 per hour; and
• Workers employed on an expanded public workers programme, who are entitled to R11.93 per hour.

Workers who have concluded learnership agreements are also entitled to certain allowances as outlined in a schedule in the Government Gazette. Sectoral determinations have also been made for the contract cleaning sector and the wholesale and retail sector. Employers in these sectors will be required to increase their minimum wages too.

The firm concluded that employers may apply for an exemption online or at their nearest branch of the Department of Employment and Labour.