Following years of deliberation, the President of the Republic of South Africa finally signed the National Minimum Wage Act, (Act No. 9 of 2018) on 23 November 2018. The Act was published in the Government Gazette on 27 November 2018. The President of the Republic of South Africa signed the English text, and as a result, the English name of the Act will be its official name. The Act came into operation on 1 January 2019.
As stated in the Act, the purpose of the Act is as follows:
“To provide for a national minimum wage;
To establish the National Minimum Wage Commission;
To provide for the appointment, composition and functions of the National Minimum Wage Commission;
To provide for the review and annual adjustment of the national minimum wage;
To provide for exemption from paying the national minimum wage; and
To provide for matters connected therewith.”
There was a real need for this Act to ensure that the most vulnerable members of society are protected and are treated fairly. The purpose of the Act is set out as follows in section 2 of the Act:
“2. The purpose of this Act is to advance economic development and social justice
(a) improving the wages of lowest paid workers;
(b) protecting workers from unreasonably low wages;
(c) preserving the value of the national minimum wage;
(d) promoting collective bargaining; and
(e) supporting economic policy.”
In terms of Section 3 of the Act, members of the South African National Defence Force, the National Intelligence Agency and the South African Secret Service are excluded from the Minimum Wage Act.
Section 5 of the Act determines that any payments made to employees in order to enable them to perform work do not form part of the minimum wage and can therefore not be included in the calculation of the amount that is payable to the employee. The employee should thus receive such payments or allowances above and beyond the minimum wage. Such payments include transport allowances, equipment allowances, tool allowances, food allowances, accommodation allowances, bonusses, tips, gifts and other prescribed amounts. Any deductions made from the remuneration of employees should still be made in terms of section 34 of the Basic Conditions of Employment Act and may not exceed a quarter of the employee’s monitory remuneration.
The new minimum wage is prescribed as follows in Schedule 1 to the Act:
“1. Subject to item 2, the national minimum wage is R20 for each ordinary hour worked.
- 2. Despite item 1-
(a) farm workers are entitled to a minimum wage of R18 per hour from a date
fixed by the President by proclamation in the Gazette;
(b) domestic workers are entitled to a minimum wage of R15 per hour from a date fixed by the President by proclamation in the Gazette;
(c) workers employed on an Expanded Public Works Programme are entitled to a minimum wage of R11 per hour from a date fixed by the President by
proclamation in the Gazette; and
(d) workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act, 1998 (Act No. 97 of 1998), are entitled to the allowances contained in Schedule 2.”
It is clear from the above that all domestic workers must be paid a wage of R15,00 per hour. Farm workers must be paid a wage of R18,00 per hour, and all other workers must be paid a wage of R20,00 per hour.
The category “domestic workers” includes gardeners, drivers employed by a household, and caretakers of children, the elderly, frail persons, disabled persons and sick persons.
Farmworkers include domestic workers and security guards employed in connection with farming or forestry activities or workers employed on a farm or agricultural premises.
In certain circumstances employers can apply to be exempted from paying the minimum wage. Section 15 of the Act deals with such exemptions. Exemptions will, however, only be temporary and other conditions may be imposed upon the reduction of the minimum wage.
The effect of the new minimum wage is that ordinary workers working 180 hours a month will now earn an amount of R3 600,00 per month. Farm workers working 180 hours a month will now earn and amount of R3 240,00 and domestic workers working 180 hours a month will now earn an amount of R2 700,00.
The details of the National Minimum Wage Commission, as provided for in the Act, have not yet been made public, and we expect more information in this regard shortly.