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Regulations permitting the exemption of employers who cannot afford to pay their workers the national minimum wage give only 10% relief to such employers.

The regulations, which came into effect this month, are contained in a notice published in the Government Gazette in December, in line with the new legislation.

The regulations read: “An exemption may be granted if the delegated authority (director-general of the Department of Labour) is satisfied that the employer cannot pay the minimum wage and if every employee representative trade union representing one or more of the affected workers has been consulted or, if there is no such trade union, the affected workers have been meaningfully consulted.”

Exemptions can be granted only from the date of application and the period of exemption may not exceed 12 months. Exempted employers are still required to pay 90% of the stipulated national minimum wage, which has been set at R20 an hour. They will therefore have to pay at least R18 an hour.

The director-general may withdraw the exemption if satisfied that the employer provided false or incorrect information when applying for the exemption, or if the employer’s financial position has improved. To test the employer’s affordability, elements of profitability, liquidity and solvency are taken into account. 

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