The National Minimum Wage Explained

The draft National Minimum Wage Bill has been finally signed into law by the President of the Republic of South Africa. The new Act appeared in the government gazette published on the 27^th of November 2018.

Who is it applicable to?
The Act is applicable to all workers and their employers except members of the South African Defense Force, the National Intelligence Agency, the South African Secret Service and volunteers who are not entitled to receive remuneration.

What is the minimum wage?
The national minimum wage has been set as follows:

• R 20 per hour for all workers except those employed in the farming and domestic employment sector and on public works programs;
• R 18 per hour for farm workers;
• R 15 per hour for domestic workers; and
• R 11 per hour for workers employed in the expanded public works program.

 
What is excluded in the calculation of the minimum wage?
The calculation of the wage for the purposes of the Act is the amount payable in money for ordinary hours of work excluding:

• any payment to be made to enable the worker to work, including transport, equipment, tool, food or accommodation allowance, unless such is specified in a sectorial determination;
• any payment in kind including board or accommodation, unless such is specified in a sectorial determination;
• gratuities including bonuses, tips or gifts; and
• any other prescribed category of payment.

 
Minimum of four hours to be paid
A further interesting provision is that a new clause is inserted into the Basic Conditions of Employment Act, 1997 (as per the amendment to the BCEA by Act 7 of 2018). Under the heading of “Daily Wage” and inserted as section 9A, any employee who works for less than 4 hours in a day must be paid at least for 4 hours worked at the applicable minimum rate.

Retrospective Application
A further interesting inclusion in the Act is contained within paragraph 17, subsection 4.
Subsection (4) states that:
 

 
Section 4 (6) of the Act stipulates that the payment of the minimum wage cannot be waived, and the national minimum wage takes precedence over any contrary provision in any contract, collective agreement, sectorial determination or law, except a law amending this Act.

One of the effects of this section could be that employers may be required to make retrospective payments to employees who have been paid below the minimum wage from the 1^st of May 2017.

In the explanatory memorandum to the National Minimum Wage Bill no further information is given as to the reason for the inclusion of this paragraph.

The paragraph will most certainly form the subject of concern for small and large employers alike and may form the subject of a legal challenge to this provision.

Can I apply for exception from paying the minimum wage?
Provision is made for an employer to apply for a limited exemption from having to pay the prescribed minimum wage.

Please contact us should you require any further information or advise.

Fred Joubert 

fred@dmrlaw.co.za