Business slams ‘random’ rule and onerous application process, while labour decries how easy it is to avoid paying the minimum
A large part of the South African economy will be exempted from the new national minimum wage (NMW), which came into effect last week.
Final regulations on exemption from the NMW were released quietly on December 19, cutting the wage floor from the much-publicised R20 an hour to R18 an hour for qualifying companies.
The threshold for qualifying is set too low, according to organised labour.
Due to its contentious nature the debate over the minimum wage amendments which became effective on January 1st 2019, the topic continues to lead news highlights. Theoretically, there should be agreement that the effects of the increase should result in benefits to the entire country but yet, and as usual the battle of Labour vs Business vs Government persists as each party remains squarely in their own corners with their opinion of the amendments. Leading from their corner, the second largest labour federation, the South African Federation of Trade Unions, SAFTU, has branded the new wages as being tantamount to slave wage, while COSATU trade union federation reports that they believe that 6.4 million employees would undoubtedly benefit from the amendments, welcoming it is as “a major cash injection into workers’ pockets”. Government praises the increase as being the catalyst for change to the lives of millions of South African’s and in an election year, what better assurance to present. Business on the other hand, predicts continued loss of jobs perpetuating the already exhaustingly high unemployment rates. Stating the minimum wage will ultimately be detrimental to the South African economy and productivity within the country. Currently the South African economy has reported just 0.7 percent growth during 2018, and an unemployment rate of 27%. The knock-on effect of which certainly does not perpetuate growth and development and which affects the entire country as a result.
National Minimum Wage
November 2017 has seen some exciting developments regarding the National Minimum Wage. Cabinet has approved the National Minimum Wage Bill, Basic Conditions of Employment Amendment Bill as well as the Labour Relations Amendment Bill. The Bills have been Gazetted, and open for public comment before being signed off by the President.
The Department of Labour have announced the minimum wages for Farm and Forestry Sector with effect 01 March 2017.
Farm and Forestry Sector Minimum Wages, 1 March 2017
Click here farm_forestrywages2017 to have a look at the new rates.
Deputy president Cyril Ramaphosa has proposed the national minimum wage in South Africa – R3,500 per month, or R20 per hour. This is how it compares to other national minimum wages across the world.
The proposed National Minimum Wage (NMW) was presented to the National Economic Development and Labour Council (NEDLAC) by a panel appointed to advise on the level at which the NMW should be set.
Currently, 47% of all workers earn less than R3 500 per month. Labour and community constituencies at NEDLAC wanted the level to be set between R3 700 and R4 500, an amount the panel concluded would put employers under pressure and lead to job losses.