012 882 0976

About the increase in the national minimum wage

The minister of employment and labour recently announced amendments to the National Minimum Wage Act, 9 of 2018 (“NMWA”) with effect from 1 March 2023. In terms of the amendments, the national minimum wage for each ordinary hour worked is now R25,42, an increase of 9,6% from R23,19.

Employees who make less than the threshold, which will rise to R241 110.59 a year with effect from 1 March 2023, are subject to the national minimum wage.

What are the new national minimum wages?

Keep in mind, there are certain exceptions to this increase in some industries. Specific groups of employees will benefit from the increase to the national minimum wage starting on March 1, 2023, including farmworkers and domestic workers, who are eligible for R25,42 for each regular hour of work.

The minimum wage for employees on expanding public works programs is R13,97 per hour. Employees who have completed a learnership agreement in accordance with section 17 of the Skills Development Act, 97 of 1998, are eligible for the allowances listed in the NMWA’s updated schedule 2.

The NMWA changes also provide for increases in minimum rates in the wholesale and retail sectors, based on the work category, as well as the contract cleaning sector, which differs between urban and some rural areas, according to the job category. Employers are encouraged to review the Sectoral Determination tables to make sure that the increases outlined in them are fully adhered to.

A focus on domestic workers’ rights

What jobs does the domestic worker category include?

Domestic workers who carry out domestic work in private homes, including gardeners, domestic helpers, drivers of vehicles and people who look after children, the sick, or the elderly in a private household

How do I calculate the minimum wage?

If a person works for less than 24 hours per month, the person is entitled to a minimum wage per hour but not necessarily to other benefits such as sick leave or vacation. There are mainly two ways to work out domestic workers’ wages: You can either keep a record of hours and compensate the worker in this way, or you can pay a monthly amount.

Someone who works full-time and who is compensated monthly may also not work more than 45 hours a week or more than nine hours a day. If a worker works for more than 45 hours per week or more than nine hours per day, the worker must receive overtime pay even if the worker is employed full-time. Overtime pay for normal overtime is 1.5 times the employee’s hourly wage. Overtime on Sundays and public holidays is double the employee’s hourly wage.

  • This means that if someone works eight hours a day at the minimum wage, and takes a lunch break of one hour which is not a paid hour of work, the person must receive at least R177,94 per day. If this is calculated over an average of 21 working days per month, a full-time domestic worker (who works seven hours a day) must get at least R3 736,74 per month.

What happens if an employer refuses to make these adjustments?

The failure by the employer to fulfil its obligations in relation to the National Minimum Wage Directive could lead to (i) an order of compliance, issued by a Department of Labour inspector and (ii) fined as set out in the BCEA.

Under the BCEA, employers who do not pay their employees a higher hourly wage may be required to pay the employee either twice (i) the value of the underpayment or (ii) the employee’s monthly salary, whichever is greater.  BCEA does not stop there. If the employer continues to violate the national minimum wage for its employees, the fine can be tripled according to the fine calculation above.

Should we enter into a new contract?

No, you do not need to enter into a new contract just to indicate the change in terms of minimum wage. However, it is always a good idea to indicate on the monthly payslip how many hours have been worked and to keep a record of it.

However, if you want to change the domestic worker’s working time or hours, this must be indicated in the contract.

Employers and employees should seek and obtain legal advice should they have any queries in respect of the new national minimum wage.