A new minimum wage will come into effect on December 1, 2016.

In accordance with the Basic Conditions of Employment Act, 1997 (BCEA), the Minister of Labour may make a sectoral determination establishing basic conditions of employment for employees in a sector and area. This includes setting minimum terms and conditions of employment, including minimum rates of remuneration. Minimum wages are set through sectoral determinations especially for vulnerable sectors; the sectors, which have low union density or where market wages are low. Domestic workers are considered to be vulnerable.

On Monday, November 7, 2016, the Minister of Labour, Mildred Olifant announced (PDF) that the minimum wage for domestic workers, including housekeepers, gardeners, nannies and domestic drivers, will be increased from December 1, 2016 and will be applicable until November 30, 2017.

The increase to the minimum wage is determined by the location of the premises at which the work is conducted. Domestic workers who work more than 27 ordinary hours per week will earn not less than:

  • R2 422.54 per month, R559.09 per week or R12.42 per hour in metropolitan areas, which represents an 8.2% increase from the previous year;
  • R2 205.17, R508.93 per week or R11.31 per hour in non-metropolitan areas. This is a 10% increase from the previous year.

Domestic workers who work less than 27 ordinary hours per week will receive:

  • a R14.54 hourly rate, a R392.58 weekly rate and a R1 701.06 monthly rate in major metropolitan areas, which represents an 8.2% increase;
  • a R13.53 hourly rate, R360.54 weekly rate and R1 562.21 monthly rate in non-metropolitan areas, which is a 10% increase.

Under section 9 of the BCEA, an employee's 'ordinary hours' may not exceed 45 hours in any week; nine hours per day if an employee works five or fewer days a week; and eight hours per day if an employee's working week exceeds five days.

The latest wage adjustment comes as Deputy President Cyril Ramaphosa has appointed a seven-person panel to advise on an appropriate level at which the national minimum wage could be set. The committee comprises representatives of government, labour, business and the community. It is charged with, among others, determining the national minimum wage. There is at present no single national minimum wage in South Africa.

A national minimum wage has mixed support. The advantages of a national minimum wage include a possible reduction of poverty and unemployment. However, certain economists argue that a national minimum wage may hamper job creation in South Africa. The likely impact of a national minimum wage would probably be determined based on the amount at which it is set.