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National Minimum Wage: understanding the basics


Cape Town, 18 Jun 2018
Deirdre Venter, partner, Webber Wentzel.
Deirdre Venter, partner, Webber Wentzel.

The National Minimum Wage (NMW) Bill was recently passed by the National Assembly and will shortly be placed before the National Council of Provinces for concurrence. It will thereafter be signed into law. The Basic Conditions of Employment Amendment Bill will be passed with the NMW Bill and both these laws will have significant consequences for employees and employers alike across all sectors and industries in South Africa.

The core issue to note is that the NMW Bill sets a minimum wage of ZAR20 per ordinary hour worked which will apply to all workers being any person who works for another and is entitled to payment either in money of kind.

* The calculation of a wage for purposes of determining compliance with the NMW Act is the amount payable to a worker in money for ordinary hours of work. Any payment to enable the worker to work, any payments in kind and gratuities, bonuses, tips and gifts are excluded in this calculation.

* The minimum wage cannot be waived by a worker and will be regarded as a basic condition and term of the employment in terms of the BCEA Amendment Act.

* Farm workers, domestic workers, learners employed in terms of the Skills Development Act and workers on expanded public works programmes will have different minimum hourly rates which will apply from a date to be fixed by the President.

* The NMW Act establishes a National Minimum Wage Commission and provides a procedure for employers to apply for exemption from paying the national minimum wage.

* Exemption may only be granted if the employer cannot afford to pay the minimum wage and after meaningful consultation with the worker or his/her representative.*

Draft regulations have been published for comment dealing with the process to apply for exemption.

It will be best to ensure that you are not at risk of non-compliance when the NMW Act comes into force shortly.

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