The National Minimum Wage

In general the report indicates restrictive labour regulations as one of the most problematic factors for doing business in South Africa.  It is therefor vital that employer comply with all requirements set by labour legislation, as well as manage labour relations proactively.

The Minister of Labour, Mildred Oliphant, informed the general public on 26 March 2018 that the National Minimum Wage Bill (NMWB) will not come in operation on 1 May 2018.  On 29 May 2018 the NMWB was passed by the Parliament and must the bill be signed and approved by the president before a date for implementation can be fixed by the president.  No date has been given for the implementation of the bill and employers are still in the dark with regards to doing proper financial planning for wage increases that comply with applicable legislation.  The Minister of Labour also published the regulations for public comment on 30 May 2018 for applications for exemption to pay the national minimum wage 

Since the start of the process to implement a NMWB three and a half years ago, a lot of uncertainty still exists regarding the NMWB with specific reference to the implementation date, the minimum wage amount, exemptions, etc.  This creates great uncertainty for both employers and employees alike and can also lead to certain expectations as a result of promises made that can create conflict in the workplace.

As the NMWB is not yet finalised and implemented, employers in the agricultural sector should still comply with all aspects as dictated by Sectoral Determination 13, which regulates labour relations in the agricultural sector.  The minimum wage for employees in the agricultural sector, effective from 1 March 2018 is as follows:
Hourly tariff:  R16.25
Daily tariff:  R146.28 (for employees who work 9 hours a day)
Weekly tariff:  R731.41
Monthly tariff:  R3 169.19

Other provisions in Sectoral Determination 13 are also still applicable, with reference to leave, working hours, deductions, overtime, housing, etc.

When the NMWB comes into effect and is implemented, employers will be obliged to pay the set amount.  This amount is currently set at R20.00 per hour for all employees in South Africa, irrespective of the industry in which they are employed.  The farming/forestry and domestic worker sectors have already been given an exemption to only pay 90% and 75% respectively of the national minimum wage.  This calculates to R18.00 per hour for the farming/forestry sector and R15.00 per hour for the domestic worker sector.  Employers in the agricultural sector should take note that a farm worker includes workers who are employed mainly or in connection with farming activities, as well as domestic workers working in a house on a farm.  This exemption is valid for two years, after which all employers must pay at least the national minimum wage as announced.  Depending on decisions taken in parliament, this period of two years can still change, but the period of two years is the latest published information available.

It can be rightly said that the whole issue surrounding the NMWB has led to great uncertainty in the workplace and will clarity be welcomed.  Compliance with labour law is not negotiable and requires specialist knowledge, which poses a business risk to the employer.