The National Minimum Wage Act (NMW Act) came into effect on 1 January 2018. The purpose of the Act is to advance economic development and justice by, inter alia, improving the wages of the lowest paid workers and protecting workers from unreasonably low wages.
These are the salient provisions of the Act:
- The NMW Act applies to all employees and employers, except members of the South African National Defence Force, the National Intelligence Agency and the South African Secret Service.
- The Act sets the national minimum wage at ZAR20 per ordinary hour worked. Domestic workers shall be entitled to ZAR15 per hours, farm workers to ZAR18 per hour, and employees on expanded public works programme to ZAR11 per hour. The provisions stipulating the amounts will come into effect from a date to be fixed by the President. Schedule 2 to the NMW Act prescribes allowances to which workers on learnership agreements shall be entitled.
- "Ordinary hours of work" means hours of work permitted in terms of sections 9, 11 and 12 as defined in the Basic Conditions of Employment Act (BCEA), as amended. These are 45 hours in any week; nine hours in any day, if an employee works for five or fewer days in a week; and eight hours a day, if an employee works for more than five days in a week. These hours may be extended by agreement by up to 15 minutes in a day, and 60 minutes in a week. An employee (earning within the earnings threshold) who works for less than four hours on any day must be paid for four hours' work on that day.
- Calculation of the national minimum wage shall exclude any payment made to enable a worker to work including any transport, equipment, tool, food or accommodation allowance and any payment in kind including board or accommodation, unless specified otherwise in a sectoral determination; gratuities including bonuses, tips or gifts; and any other prescribed category of payment.
- The minimum wage cannot be waived, will take precedence over a contrary provision of a contract of employment, collective agreement, sectoral determination or law and will constitute a term of the employment contract unless the contract of employment, collective agreement or law provides for a wage that is more favourable.
- It is an unfair labour practice for an employer to unilaterally alter wages, hours of work or other conditions of employment in connection with the implementation of the national minimum wage.
- An employer's or employer's organisation may apply for an exemption from paying the national minimum wage for a period not exceeding a year.
- The national minimum wage will be reviewed annually by the National Minimum Wage Commission. The first review shall be conducted within 18 months of the commencement of the NMW Act. The Commission may make recommendations to the Minister of Labour on any adjustment.
- Section 17(4) incorrectly refers to subsection4(6) rather than 4(8) in terms of retrospective effect from 1 May 2017. Section 4(8) stipulates that it is an unfair labour practice for an employer to unilaterally alter wages, hours of work and other conditions of employment. The section seeks to prevent a situation where an employer unilaterally changed certain conditions of employment once the Bill had been tabled in parliament to avoid paying the minimum wage. Currently, the Act stipulates that, in accordance with section 4(6), the minimum wage be back-dated to 1 May 2017. An Amendment Bill is to be published for comment early in February 2019 once approval from the national assembly has been obtained to rectify the error.