National Minimum Wage Increase

ARMS members and employers alike are reminded that continuous compliance with labour laws is essential, especially as it relates to adhering to the payment of the national minimum wage.

The penalties of a failure to comply with the national minimum wage should be avoided at all cost. A fine that may be imposed on an employer who paid an employee less than the national minimum wage, is an amount that is the greater of twice the value of the underpayment; or twice the employee’s monthly wage.

For second or further non-compliances, a fine that may be imposed on the employer is an amount that is greater of thrice the value of the underpayment; or thrice the employee’s monthly wage.

The Minister may issue guidelines on the determination of whether a non-compliance is a second or further non-compliance and the Department of Employment and Labour must also maintain and publish on its official website, on a quarterly basis in an effort to call out employers who fail to comply with the national minimum wage.

In order to guide and assist employers to avoid the above penalties, ARMS has compiled this article regarding the increase in the national minimum wage and how it will affect your industry.

General Increase

According to Government Gazette 44136 most employees’ national minimum wage for each ordinary hour work will increase from R20.00 to R21.69.

This was announced on 8 February 2021, by Employment and Labour minister Thembelani Nxesi, who indicated that the wage will increase as of 1 March 2021.

Furniture Industry

Employers within the furniture industry are reminded that Part III Annexure A (C) of the Main Collective Agreement has been substituted with the following table:

Wholesale and Retail

Employers in the wholesale and retail industry can refer to the amended Table 1 and 2 on pages six to seven of the Government Gazette (insert link to Gazette).

The minimum wage applicable to your employees will be determined by the job descriptions and area in which you are operating your business.

Contract Cleaning Sector

Employees within the contract cleaning sectors’ wages will also increase based on the specific area in which the employer is doing business (employers in this industry can consult amended Schedule 2 on page 5 of the Government Gazette):

Domestic Worker Sector

All individuals employing domestic workers are cautioned that the minimum wage for employees in this sector will increase from 1 March 2021 to R19.09 per hour.

Agricultural Sector

The agricultural sector minimum wage will from 01 March 2021 be equal to the national minimum wage for 2021 of R21.69.

The agricultural sector previously received an exemption to pay only 90,0% of the national minimum wage (it amounted to R18.68 in 2020). However, this exemption has now expired and the minimum wage for farm workers has been matched to the national minimum wage for 2021.

This calculates to a 16,1% increase of the previous minimum wage for farm workers of R18.68 per hour (2020) to R21.69 per hour (2021).

Employers in the agricultural sector should take note that domestic workers on a farm are regarded as farm workers and must receive the correct wage.

Other Industries

Employers in the Building Industry, Motor Industry and all other industries are reminded to consult the adjusted minimum wages for their industries and to ensure that they are compliant.

Conclusion

Do you have any concerns about how labour costs are affecting the sustainability of your business?

Are you looking for affordable solutions to effectively dealing with disciplinary hearings, defending your positions in the CCMA or maybe even considering restructuring?

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