New earnings threshold and increase in national minimum wage

Increase in earnings threshold

The Minister of Employment and Labour has announced that the earning threshold has been increased. Previously, the earnings threshold was ZAR211 596.30 per year (approximately ZAR17 633.00 per month). As of 1 March 2022, the new earnings threshold will be R224 080.48 per year (approximately R18 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. These sections deal with hours of work, Sunday time pay, meal breaks, and overtime, amongst other things.

The increase in the threshold will mean that from 1 March 2022, some employees who earn more than R211 596.30 but less than R224 080.48 per year may be entitled to additional protections, such as overtime payment when working more than 45 hours per week, compulsory breaks, 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 R21.69 for each ordinary hour that an employee works to R23.19 for each ordinary hour that an employee works. This is an increase of R1.50 per hour.

It is important to note that farm workers and domestic workers will also be entitled to the same national minimum wage. Sectoral determinations have also been made for the Contract Cleaning Sector and the Wholesale and Retail Sectors. Employers in these sectors will be required to increase their minimum wages, too.

Invictus Group is able to assist employers with applications for exemption. Contact us on 0861 737 263 for assistance with exemption as well as other employment related issues, so our team of experts can provide you with best practice advice and assistance.