Annual increase to the National Minimum Wage

The National Minimum Wage in South Africa was officially implemented on 1 January 2019. 

This milestone marked a significant moment in the country's history, as it represented a concerted effort by the government to address income inequality, improve living standards for low-wage workers, and promote social justice within the labour market.

On 1 February 2024, the Minister of Employment and Labour signed an amendment adjusting the monetary value of the National Minimum Wage of 2018.

Instituted against the backdrop of historical disparities and socio-economic challenges, the minimum wage serves as a mechanism for economic empowerment, striving to bridge the gap between the affluent and the marginalised sectors of society.

In this article, we present the revised National Minimum Wage rates and Learnership Allowances for the year 2024, which will come into effect on March 1st, 2024

What is the purpose of the National Minimum Wage Act (NMWA)?

Section 2 of the Act states that the purpose of the NMWA is to advance economic development and social justice by–

• improving the wages of lowest paid workers;
• protecting workers from unreasonably low wages;
• preserving the value of the national minimum wage;
• promoting collective bargaining; and
• supporting economic policy.

Who will be affected by the NMWA?

The Act applies to all workers and their employers except members of the South African National Defence Force, the National Intelligence Agency, and the South African Secret Service.

What are the new National Minimum Wage rates and when do they come into effect?

The latest National Minimum Wage as set out below will become effective from 1 March 2024.

Schedule 1 of the National Minimum Wage:

1. Subject to item 2, the National Minimum Wage is R27,58 for each ordinary hour (or normal hour) worked.
2. Notwithstanding item 1–

• farm workers are entitled to a minimum wage of R27,58 per hour;
• domestic workers are entitled to a minimum wage of R27,58 per hour;
• workers employed on an expanded public works programme are entitled to a minimum wage of R15,16 per hour;
• 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 allowance referred to in Schedule 2 below.

Schedule 2: Learnership Allowances (Section 6(5)):

Schedule 2 - Sectoral Determination 1: Contract Cleaning Sector

The Contract Cleaning Sector’s minimum hourly rates have been amended as follows:

• Area A – The rate per hour is R30,35;
• Area B – The rate per hour is in accordance with the BCCCI rates;
• Area C – The rate per hour is R27,67.

Schedule 2 - Sectoral Determination 9: Wholesale and Retail Sector

The Wholesale and Retail Sector’s minimum wages for Area A (Table 1) and Area B (Table 2) have been adjusted and were published in Government Gazette No. 50073 dated 2 February 2024, confirming the rate for a specific job category in a region.

How to determine an employee’s hourly rate?

In terms of the Act, a wage is the amount payable in money for ordinary hours of work also referred to as normal working hours. This amount excludes any payment to enable an employee to work, such as transport fees, equipment, tool, food or accommodation allowance, any payment in kind and gratuities such as bonuses, tips or gifts. This is applied unless otherwise specified in law.

Can exemption be applied for?

Employers, or employers’ organisations registered in terms of section 96 of the Labour Relations Act, 1995 (Act No. 66 of 1995) or any other law, acting on behalf of the employer, may apply for an exemption from paying the national minimum wage. It must comply with the prescribed form and manner as indicated in section 15(1) of the NMWA.

Who will enforce this amendment?

A labour department inspector, after an inspection has been concluded, may secure an undertaking in terms of section 68(1) of the Basic Conditions of Employment (Act No. 75 of 1997) (BCEA) by the employer to comply with the provision of the NMWA, or issue a Compliance Order in terms of section 69(1) of the BCEA.

What are the consequences of non-compliance with the amended NMWA?

Should an employer unilaterally change wages, hours of work, or other conditions of employment in connection with the implementation of the national minimum wage, it would be deemed an unfair labour practice. An employer may also be required to reimburse an employee retrospectively for a period of non-compliance. A fine may be imposed on an employer who pays an employee less than the National Minimum Wage as stated in section 76A (1) BCEA.

SERR Synergy assists employers in understanding all elements of new employment-related legislation and specifically the National Minimum Wage Act. Our professional labour teams across South Africa will provide employers with guidance regarding the adjusted National Minimum Wage specific to their business and industry to ensure that they are compliant with the latest adjustments and amendments and that the company continues to flourish.

About the author: Janrie Booysen is a SERR Synergy Labour Manager. She holds an LLB and BA in Anthropology and Psychology from the University of South Africa.

Sources acknowledged:

Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997).

Labour Relations Act, 1995 (Act No. 66 of 1995).

National Minimum Wage Act, 2018 (Act No. 9 of 2018).