Cape Town – Hailed as a historic victory for the country’s workers, the National Minimum Wage Act (NMWA), recently signed into law by President Cyril Ramaphosa, is set to boost the earnings of South Africa’s labour force.
The minimum wage was started by the ANC’s pound a day campaign.
The new law would come into force on a date to be determined by Ramaphosa, said the Presidency, adding it set a historic precedent in the protection of low-earning workers.
The act sets South Africa’s first national minimum wage at R20 an hour - equivalent to about R3 500 a month, depending on the number of hours worked.
This creates a phase-in period for farmworkers, forestry workers, domestic workers, welfare-sector and care workers, due to their vulnerability to dis-employment.
Ramaphosa’s spokesperson, Khusela Diko, said: “President Ramaphosa has reiterated his appreciation to all stakeholders engaged in the development of the legislation for their focus on creating a new dispensation for the country’s most vulnerable workers and for bringing South Africa into line with international best practice.
“The president has also underscored that while the national minimum wage will not end income inequality, it provides a firm and unassailable foundation, which is agreed to by all social partners, from which to advance the struggle for a living wage.”
The act has been in the works since 2015, initially formulated at the National Economic Development and Labour Council (Nedlac), with parties agreeing to set the minimum hourly wage rate of R20 in 2017.
Head of labour and development at Agri-SA Jahni de Villiers said: “As with any wage increase, we are concerned that it may have a negative impact on employment growth in the agricultural sector.
"Notwithstanding, we welcome that we now have certainty of the implementation date. We encourage all our members to comply with the law and to utilise the exemption process where it may be necessary.”
Business Unity SA has hailed the decision, saying it was a positive step towards stabilising South Africa’s labour relations environment and signalled the country’s commitment to social reform and social compacting.
SA Chamber of Commerce and Industry policy and advocacy manager Joan Stott said: “All social partners considered the underlying data around poverty levels in SA, along with the cost of living, during these negotiations.
"This, however, may impact on our members’ abilities to retain current levels of employment. Since this increase in the minimum wage represents an additional cost to employers - along with recently increased interest rates, electricity prices and general costs of doing business.”
Stott said as long as the economy grows, businesses may be able to retain employees under this agreement.
SA Transport and Allied Workers Union spokesperson Zanele Sabela said the union welcomed the move and looked forward to its implementation, particularly in sectors where they organise vulnerable workers.
Janine Myburgh, president of the Cape Chamber of Commerce and Industry, said the test for every piece of new legislation was whether it would create more jobs, and if not, it should be rejected and other remedies examined.
The provincial Department of Economic Opportunities spokesperson, Bianca Capazorio, said: “The Western Cape government’s number one priority is the growth of the economy and the creation of jobs.
‘‘As such, we will track the implementation of the legislation and the impact it has on our ability to do this going forward.”