South African national minimum wage and earnings threshold increased

On 7 and 8 February 2022, two significant developments took place in the employment law arena. These will have far-reaching implications for employers and employees alike.

New earnings threshold

First, today, 8 February 2022, the Minister of Employment and Labour has announced that the so-called “earning threshold” has been increased.

Previously, the earnings threshold was ZAR211 596.30 per year (approximately ZAR17 633.00 per month). As from 1 March 2022, the new earnings threshold will be ZAR224 080.48 per year (approximately ZAR18 673.37 per month).

“Earnings” includes the employee’s regular annual remuneration before deductions, but excludes benefits such as subsistence and transport allowances, achievement awards and payments for overtime worked. Employees who earn more than the earnings threshold per annum are excluded from the protection of sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) of the Basic Conditions of Employment Act, 1997.

The increase in the threshold will mean that from 1 March 2022, some employees who earn more than ZAR211 596.30 but less than ZAR224 080.48 per year may be entitled to additional protections, such as overtime payment when working more than 45 hours per week, compulsory breaks and rest periods, night work allowances and the like.

Increases in the national minimum wage

The Minister of Employment and Labour has also published increases in the national minimum wage and various sectoral determinations. These increases are also effective from 1 March 2022.

The national minimum wage will change from ZAR21.69 for each ordinary hour that an employee works to ZAR23.19 for each ordinary hour that an employee works. This is an increase of ZAR1.50 per hour.

It is important to note that farm workers and domestic workers will also be entitled to the same national minimum wage. However, workers employed on an expanded public workers programme are entitled to ZAR12.75 per hour. Sectoral determinations have also been made for the contract cleaning sector and the wholesale and retail sector. Employers in these sectors will be required to increase their minimum wages, too.

In addition, workers who have concluded learnership agreements are entitled to certain allowances as outlined in a Schedule in the Government Gazette.

Employers may apply for exemption online or at their nearest branch of the Department of Employment and Labour.

Lauren Salt
Employment | Executive
lsalt@ENSafrica.com
+27 84 509 6494

Jessie Gertzen
Employment | Candidate Legal Practitioner
jgertzen@ENSafrica.com
+27 71 125 6135