INTRODUCTION

Employment and Labour Minister TW Nxesi announced that the National Minimum Wage (NMW) for each ordinary hour worked will increase from R23.19 to R25.42 with effect from 01 March 2023.

The news brings a sigh of relief in poorer households who has been significantly impacted by the inflation rate. Considering that the impact of the inflation rate for poorer households is higher than higher-income earners, due to the steep increase of food prices and other basic living needs.

The International Labour Organisation in 2014, defined minimum wage as the amount that an employer is required to pay wage earners over a period, that cannot be reduced or changed by a collective agreement or an individual contract. The purpose of minimum wage is to protect workers from unduly low payment. The Minimum Wage Act was established to redress the injustices of the past by firstly acknowledging that South Africa is one of the most unequal societies in the world, thus obliging the state to uphold their constitutional obligation to promote fair and effective competition in the labour market.

The regulation of wages contributes to social justice and a stable industrial relation, more importantly it assists in reducing poverty or State dependency. It is no secret that a large group of people fall within the middle-class population index, this means that there are households which have become conditioned to “working poverty” only being able to cover the essentials to support their living needs.

ENFORCEMENT

As a point of departure, the most important concept it hosts in mind is that the purpose of minimum wage is to protect the most vulnerable employees, this means those who earn below R211,596,20 per annum before tax and contributions. Moreover, employers must be strongly reminded that the National Minimum Wage excludes allowances that assist employees to work. These allowances include but not limited to transport, equipment, accommodation, bonuses, or food. The increase in minimum wage could not have come a better time since the cost of living in South Africa has increased significantly since 2017 when the minimum wage was tabled.

BRIEF BREAKDOWN OF THE MINIMUM WAGE INCREASE:

Farm workers are entitled to a minimum wage of R25,42 per hour;

Domestic workers are entitled to a minimum wage of R25,42 per hour;

Workers employed on an expanded public works programme are entitled to a minimum wage of R13,97 per hour

Workers who entered learnership agreements with their employers are entitled to an allowance that is determined by the national qualifications’ framework

CONCLUSION

The National Minimum wage increase will not solve the growth in poverty neither will it significantly decrease state dependency. What the increase will assist with is access to basic living needs while providing a safety net for employees, especially domestic workers. A regulated system brings us closer to redress of economic and social justice and that is certainly a worthy step in the right direction. Download the latest amended Act here.

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