As of January 1, 2019, South Africa’s first-ever national minimum wage is in effect.

The Act provides that the minimum wage will be determined regularly by the Minister of Labour. The Minister has determined that the initial minimum wage is set at R20 per hour. Based on that hourly rate and the Basic Conditions of Employment Act, the weekly and monthly wage can be calculated on the ordinary hours of work of an employee.

Part-time workers must be paid at no less than R20 per hour, provided that a worker cannot be paid for fewer than four hours in a day worked. That implies that if an employee only worked for two hours on a certain day, the employee must be paid for four hours for that day, or at least R80.

The R20 per hour rate will be phased in slowly in the agriculture and domestic work sectors, with workers earning R18 and R15 per hour respectively. People employed on the expanded public works programmes of the government earns R11 per hour.

The minimum wage of R20 an hour is what a worker must receive in cash. It cannot include benefits such as transport, meals or accommodation allowances unless the Minister makes a determination that such benefits may be included in the minimum wage for a specific group of workers (such an example may be Sectoral Determination 13 applicable to farm workers). The minimum wage can also not include any tips or bonuses a worker receives.

The National Minimum Wage Act does not state anything about the penalties for not paying minimum wage, but the amendment to the Basic Conditions of Employment Act that was also signed into law recently, states that an employer must be fined for not paying the minimum wage. The Minister must however still publish guidelines to help with the determination of these fines.

The Act furthermore creates a National Minimum Wage Commission made up of equal representatives from business, labour, “organised community” and independent experts. The Commission will review the minimum wage every year and determine whether it has the desired effect on the alleviation of poverty and the reduction of inequality in wages – taking into account inflation, the cost of living, productivity and the impact it has on employers, among other things. The Commission must write a report to the Minister and the President every year based on their consideration of these factors and must also include the views of the public in their report. The Minister will determine the adjustment to the minimum wage amount annually based on this report. The Act provides, however, that the first review of the new minimum wage should only happen after two years (on 1 January 2021).

Sources: Fin24 & GroundUp