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Increase in Basic Conditions of Employment Act Earnings Threshold and the National Minimum Wage for 2022

By Jan du Toit

 

Section 6 of the Basic Conditions of Employment Act makes provision for the Minister of Employment and Labour to determine an earnings threshold.

 

The effect of such threshold is that it excludes employees earning above the determined amount from the protection offered to employees under certain sections of chapter 2 of the Act. Chapter 2 of the BCEA primarily deals with the regulation of working hours of employees.

 

Additionally, as per sections 198, 198 A, B, C and D of the Labour Relations Act, employees earning below the earnings threshold are considered to be vulnerable and are entitled to additional protection pertaining to non-standard employment arrangements such as fixed term contracts, labour broker and part-time employees.

 

As from the 1st of March 2022, the earnings threshold will be increased from R211596.30 per annum to R 224080.48 per annum (R18673.37 per month).

 

"Earnings” means gross pay before deductions, such as income tax, pension, medical insurance and similar payments, but excludes similar payments (contributions) made by the employer in respect of the employee.

 

The sections of the Basic Conditions of Employment Act from which such employees are excluded are:

 

9.   Ordinary hours of work

10.  Overtime

11.  Compressed working week

12.  Averaging of hours of work

14.  Meal intervals

15.  Daily and weekly rest period

16.  Pay for work on Sundays

17.  Night work -17(2) that deals with transport and night shift allowances

18.  Public holidays – 18(3) that deals with payment for work on a public holiday that falls on a day on which the employee would ordinarily not have worked.

 

Employees earning below the threshold amount:

Such employees are entitled to the full protection of every section of the Basic Conditions of Employment Act (BCEA). Additionally, such employees are also considered to be vulnerable for the purposes of non-standard employment arrangements as per the Labour Relations Act.

 

Employees earning above the threshold amount:

Employees earning above the threshold amount do not have a statutory right to demand minimum employment conditions insofar as it relates to the provisions of sections 9, 10, 11, 12, 14, 15, 16, 17(2), and 18(3) of the BCEA. Employment conditions dealt with under the aforementioned sections may be negotiated between employer and employee. The agreed employment conditions may well be less favourable than those applicable to employees earning below the threshold.

 

National Minimum Wage for 2022

Employment and Labour Minister TW Nxesi announced that the National Minimum Wage (NMW) for each ordinary hour worked will increase from R21,69 to R23.19 with effect from 01 March 2022.

 

As in previous years, the adjustment provides exceptions for several worker groups, including:

 

  1. Farmworkers are entitled to a minimum wage of R23.19 per hour;

  2. Domestic workers are entitled to a minimum wage of R23.19 per hour;

  3. Workers employed on an expanded public works programme are entitled to a minimum wage of R12.75 per hour;

  4. Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act, 1998 (Act No 97 of 1998), are entitled to allowances contained in schedule 2.

 

It is illegal and unfair labour practice for an employer to unilaterally change working hours or other employment conditions in order to implement the NMW. The NMW is the amount payable for ordinary hours of work and excludes payment of allowances (such as transportation, tools, food, or lodging), payments in kind (board or lodging), tips, bonuses, and gifts.

 

Jan du Toit can be contacted at [email protected]

 

 

 

 

 

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