The National Minimum Wage Act 9 of 2018 (NMWA) came into operation on 1 January 2019.
The Minister of Labour also released the National Minimum Wage Regulations, 2018 (Regulations) which came into operation on 1 January 2019.
The Regulations provide information on the criteria to be met and process to be followed by any employer wishing to be exempted from the national minimum wage. The national minimum wage figures as they currently stand are:
All workers: R20 per hour
Farmworkers only: R18 per hour
Domestic workers only: R 15 per hour
The national minimum wage figures reflected above will remain in force for the next two years (i.e. until December 2020). In January 2021, the Minister of Labour will announce whether the national minimum wage will be adjusted in any way.
Section 15 of the NMWA, read together with the Regulations, provides an exemption process for employers.
The exemption process is specifically created for employers who can show that they cannot afford to pay the national minimum wage to workers.
An exemption will only be granted if the following criteria are satisfied by the applicant employer: the employer cannot afford to pay the national minimum wage; and representative trade union(s) of the workers have been meaningfully consulted or, if there are no trade union(s), the affected workers have been meaningfully consulted.
To assess affordability, elements of profitability, liquidity and solvency are taken into account. The decision-making process is rigorous and employers will need to ensure that they submit comprehensive financial and organisational information when applying for exemptions.
No exemption may be granted where the wage is below the following wage thresholds:
- 90% of the national minimum wage in respect of workers other than farm workers and domestic workers;
- 90% of the national minimum wage in respect of farm workers; or
- 90% of the national minimum wage of domestic workers.
- the period of exemption;
- the wage(s) that the employer is required to pay workers; and
- any other relevant condition.
- If unsuccessful, the employer will also be provided an exemption notice which will contain reasons for the refusal.