President Cyril Ramaphosa has just announced that the National Minimum Wage will become effective on January 1. Photo: GCIS

CAPE TOWN – President Cyril Ramaphosa has just announced that the National Minimum Wage will become effective on January 1. 

This means that employers need to standardise the amount that they pay workers to be in line with the R20 per hour floor.

What does this mean for your business?

To be compliant with this new legislation, and avoid penalties, there are a number of things that employers need to have in place:

  • Minimum wages set by sectoral determinations fall away if these are below R20. This does not apply to domestic or farm workers. 
  • Employers are now legally required to standardise the minimum amount they pay workers at R20 per hour. This means that employers will need to increase the amount paid to workers who earn less than this.
  • The R20 per hour does not include contributions employers may make to workers’ transport, food, accommodation or gratuities. This is to be paid over and above the R20 per hour.
  • Employers are required to pay workers for at least four hours a day.

Global Business Solutions chief executive, Jonathan Goldberg said: “The fact that so much time has elapsed between the first introduction of the notion of the National Minimum Wage and President Cyril Ramaphosa signing the National Minimum Wage Act into law shows government’s commitment to minimising any job losses that may be caused by this introduction. 

“However, given the current strained economic climate in South Africa businesses are now going to need to re-think and re-strategise how they will remain profitable in 2019.”

BUSINESS REPORT ONLINE