Following the announced minimum wage in the country, South African workers have a reason to smile for a long time. The national minimum wage ensures equal pay across a majority of the South African workforce.
Domestic workers and farm workers are not left out of the new national minimum wage as they will also enjoy a 100% increment. The new national minimum wage (NMW) will be implemented with effect from March 1st, 2022.
What is a Minimum Wage?
According to the International Labour Organization (ILO), a minimum wage is defined as the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.
Benefits of a Minimum Wage?
With the high cost of living in the country, it is imperative that the government set a new minimum wage that can sustain the citizens. With the high cost of basic needs and bills such as transport and electricity, the need for an improved minimum wage cannot be overemphasized.
Furthermore, the increase in costs of living is also influenced by local and international factors and is expected to go higher in the near future. As such, there is there need to compensate the workforce with an improved minimum wage.
South African National Minimum Wage
In February 2022, Employment and Labour Minister Thulas Nxesi announced the 2022 National Minimum Wage (NMW) in South Africa. According to the minister, the minimum wage for each ordinary hour of work has been increased from R21,69 to R23.19 for the year 2022.
As in previous years, the adjustment provides exceptions for several worker groups, including:
- Farmworkers are entitled to a minimum wage of R23.19 per hour;
- Domestic workers are entitled to a minimum wage of R23.19 per hour;
- Workers employed on an expanded public works programme are entitled to a minimum wage of R12.75 per hour;
- Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act, 1998 (Act No 97 of 1998), are entitled to allowances contained in schedule 2.
It is illegal and unfair labour practice for an employer to unilaterally change working hours or other employment conditions in order to implement the NMW. The NMW is the amount payable for ordinary hours of work and excludes payment of allowances (such as transportation, tools, food, or lodging), payments in kind (board or lodging), tips, bonuses, and gifts.
Factors Considered When Implementing a Minimum Wage
According to the National Minimum Wage (NWC) Act of 2018, the commission is required to review the rates on an annual basis and make recommendations to the Minister on any changes to the national minimum wage, while also taking into account alternative viewpoints, including those of the general public.
The Commission considers the following factors when determining the annual adjustment:
- Inflation, the cost of living, and the need to maintain the value of the minimum wage
- Gross domestic product
- Wage levels and collective bargaining outcomes
- Employers’ ability to carry on their businesses successfully
- The operation of small, medium, or micro-enterprises and new enterprises
- The likely impact of the recommended adjustment on employment or the creation of employment.