Picture: CHRIS RATCLIFFE, BLOOMBERG, 2012 BLOOMBERG FINANCE LP

President Cyril Ramaphosa has announced that the National Minimum Wage will become effective on January 1, 2019. This means that you need to standardise the amount you pay your workers to be in line with the R20 an 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 you 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. You are now legally required to standardise the minimum amount you pay your workers at R20 an hour. This means that you will need to increase the amount paid to workers who earn less than this.

* The R20 an hour does not include contributions you may make to your workers’ transport, food, accommodation or gratuities. This is to be paid over and above the R20 an hour.

* You are required to pay your workers for at least four hours a day.

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

“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,” Goldberg says. 

Supplied Global Business Solutions