1st March 2021

The new minimum wage 2021

Why minimum wage is important?

The process of implementing and setting up  a minimum wage began around 1999,but only truly came into effect around 2002. It all started when a trade union investigated the working conditions versus what the individual got paid. The minimum wage was then introduced around protecting domestic workers from exploitation and the important step of recognizing domestic workers rights. They were no longer seen as servant but independent workers, that provide for the families. It was the revolution of de-slaving and reasserting the dignity of domestic workers.

The minimum wage was the amount that any employer could pay during a period in which could not be reduced through collective agreement or individual contracts. In other word in bind and provided a voice on negotiation from exploitation. Policies were one element that could be implemented to overcome and reduce poverty in the workplace as well as establish inequality between genders. Promoting the fair and right to equal remuneration for work of equal value.

The new minimum wage

On the 8th of February 2021, the Minister announced the that the new minimum wage Act 2018 will be effective from the 1st of March 2021. The New minimum wage does not prescribe an increase for workers earning more than the national minimum wage.

Below is a table setting out the amendments to the national minimum wage and the new minimum wages for 2021.

The figures are for the Johannesburg/Gauteng areas.

Minimum wage per hour (Johannesburg/Gauteng areas) 2020 2021 with effect from 1 March 2021
General R20,76 R21,69
Farm Workers R18,68 R21,69
Domestic Workers R15,57 R19,09

The general national minimum wage has been increased by 4,5%.

Farm workers increased with 16%.

Domestic workers increased with 22,6%.

The adjustment of the minimum wage for domestic workers and farmworkers would amount to an increase of about R450,00 per month for a domestic worker and about R350,00 per month for a farmworker.  This is amount is not clear on the hours worked. If they do work 45h per week then the amount will change.

A daily rate for domestic workers is R152.72, while a monthly rate for 20 working days comes to about R3,054.

Also note the expanded public works program are entitled to R11.93 per hour and workers who have concluded learnership agreements are entitled to allowances as determined by the national qualifications’ framework level.

The threshold earnings

Persons earning over the threshold amount do not have a legal right to demand anything in respect of Sections 9, 10, 11, 12, 14, 15, 16, 17(2), and 18(3) of the Act with effect from 1st of March 2021. The employer must however in determining the hours of work of the employee earning above the threshold take into consideration section 7 of the Act:

In terms of the EEA, an employee earning more than the earnings threshold who has a dispute under Chapter II of the EEA relating to unfair discrimination, is not permitted to refer the dispute to the CCMA for arbitration (unless the dispute relates to alleged unfair discrimination on the grounds of sexual harassment, or the parties all agree to arbitration) and is obliged to refer the dispute to the Labour Court for adjudication.

For purposes of determining whether an employee earns more than the earnings threshold, “earnings” means an employee’s regular annual remuneration before the deduction of income tax, pension fund contributions, medical aid contributions and similar payments, but excludes similar contributions made by the employer in respect of the employee. This is subject to the proviso that subsistence and transport allowances received, achievement awards and payments for overtime worked do not fall within the scope of remuneration. For further read: www.cliffedekkerhofmeyr.com

The increase in the threshold will mean that from 1 March 2021, some employees who earn more than ZAR205 433.30 but less than ZAR211 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.

For more information about how our team can assist you, email info@inspirantelc.co.za

Visit our website www.inspirantelc.co.za

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