Employment and Labour Minister, Thulas Nxesi (Minister), has announced that the National Minimum Wage Act (NMWA) has introduced a new National Minimum Wage (NMW).
South African workers will see the implementation of the increased annual earnings threshold determined by the Minister, in the amount of R224,080.48. This represents an increase of R12,484.18 from the previous amount of R211,596.30. Therefore, the NMW for each ordinary hour worked has been increased from R21.69 to R23.19 for the year 2022, effective 1 March 2022.
The term ‘worker’ means any person who works for another and who receives, or is entitled to receive, any payment for that work whether in money or in kind.
This means that-
employers may not pay wages that are below the minimum wage;
the national minimum wage cannot be varied by contract, collective agreement or law; and
the national minimum wage automatically constitutes a term of the worker’s contract except to the extent that the contract provides for a more favourable wage or the employer has been exempted.
As in previous years, the adjustment provides exceptions for several worker groups. These groups include farmworkers as they are entitled to a minimum wage of R23.19 per hour and 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 while 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.
The national minimum wage is calculated with reference to the amount payable for the ordinary hours of work. This means that a worker is entitled to receive at least the minimum wage for the number of ordinary hours that the worker works in a day. Notwithstanding this, a worker must be paid for a minimum of four hours per day even if he/she works less than four hours on a given day
The national minimum wage does not include the payment of allowances (such as transport, tools, food or accommodation allowances), payments in kind (board or lodging), tips, bonuses, and gifts, therefore, if such payments are applicable to the worker, the payment of same will be made over and above the national minimum wage.
The payment of the national minimum wage is mandatory and cannot be excluded, even by agreement between the parties. The only time the employer would be allowed not to pay the national minimum wage is where the employer has been duly exempted from payment of the national minimum wage, through an exemption certificate issued by the National Minimum Wage Commission, which exemption is only valid for a period of 12 months, unless renewed accordingly.
The earnings threshold will impact on the application of provisions of the Basic Conditions of Employment Act, 1997 (BCEA), the Labour Relations Act, 1995 (LRA) and the Employment Equity Act, 1998 (EEA).