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National Minimum Wage Recommendation

Nov 21, 2016

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NATIONAL MINIMUM WAGE
RECOMMENDATION

Latest developments

 

On Sunday, 20 November 2016, Deputy President Cyril Ramaphosa announced the recommendations by an Advisory Panel on the envisaged ‘national minimum wage’.

Please note that these are only recommendations and that the detail has to be finalised in the National Economic Development and Labour Council (NEDLAC). The Deputy President indicated that a process of wide public consultation will be followed before NEDLAC will make a final decision in this regard.

The Advisory Panel is proposing a national minimum hourly rate of R20-00 (R 3 500.00 per month), but also proposes that from the date that a national minimum wage is legislated, there must be an ‘adjustment period’ of two years before the wage is finally implemented.

The two exceptions to this proposal are:-

  • domestic workers, where a minimum wage of 75% of the proposed minimum wage is suggested, with a 3 (three) year ‘adjustment period’; and
  • farmworkers, where it is suggested that a minimum wage of 90% of the proposed minimum wage must apply.

The Advisory Panel has proposed that the R20-00 threshold must remain unchanged for the duration of the ‘adjustment period’.

Certain industries (i.e. the Metal-, Motor-, Road Freight- and Motor Ferry) are already paying wages higher than what is proposed and will therefore not be affected.

Other industries however (i.e. Food and Catering-, Taxi-, Forestry-, Wholesale and Retail-, Building-, Private Security Industries, Farm- and Domestic Workers) are paying less than the proposed minimum wage and will therefore have to prepare for substantial adjustments (some sectors more than others) over the course of the next two years (three years in the case of domestic workers) – that is if the recommendations by the Advisory Panel eventually finds its way to parliament.

According to the Deputy President, government has attempted to find a compromise by not setting a minimum wage on a level so low that it is meaningless, and not so high that it will lead to job losses.

We will keep you informed of the unfolding events in this regard.

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