Increase to the National Minimum Wage Hourly Rates
Important national minimum wage information has been published in the following two Gazettes:
1.National Minimum Wage Commission Review Report [Gazette # 45649 on 17 Dec 2021]
2.National Minimum Wage Act Amendment – Increased Wage Rates [Gazette # 45882 on 7 Feb 2022]. Legislation Background to NMW Increases
Effective from 1 January 2019, the National Minimum Wage Act (NMW Act) provides for the national minimum wage rate requirements and related matters, and instructs that the minimum wage rates must be reviewed annually. NMW Act Section 4(2)
Any minimum wage rate that is not reviewed regularly would soon fall behind inflation and cease to be relevant. The intention to change the rates on an annual basis is specified in section 4(2) of the NMW Act, and the responsible party is the National Minimum Wage Commission that is established and given responsibilities and duties in sections 6 to 14. NMW Act Section 9
Section 9 sets out the composition of the Commission, as follows:
1.A chairperson appointed by the Minister
2.three members nominated by organised business
3.three members nominated by organised community
4.three members nominated by organised labour, and
5.three independent experts, who are knowledgeable about the labour market and conditions of employment, appointed by the Minister. NMW Act Section 6
Section 6 puts a duty on the Commission to review the national minimum wage annually and make recommendations to the Minister on any adjustment of the national minimum wage rate. Note that “any” adjustment means that the Commission can potentially recommend an increase (this is normally the case), a decrease, or no change, to the NMW rate per hour depending on the Commission’s findings in its review. The final decision is made by the Minister. NMW Act Section 7
Take note of Section 7. For the purpose of the annual review, the Commission must in general promote:
1.the medium-term targets referred to in section 11(d) (to set medium-term targets for the minimum wage rate)
2.the alleviation of poverty, and
3.the reduction of wage differentials and inequality. When considering increases, the Commission must consider the following economic factors:
1.inflation, the cost of living and the need to retain the value of the minimum wage
2.wage levels and collective bargaining outcomes
3.gross domestic product
4.productivity
5.ability of employers to carry on their businesses successfully
6.the operation of small, medium or micro-enterprises and new enterprises
7.the likely impact of the recommended adjustment on employment or the creation of employment, and
8.any other relevant factor. All the above are important economic factors, but arguably the seventh one is the most important – unemployment. National Minimum Wage Rates – Increases
In a welcome acknowledgement of the economic role that payrolls play , the National Minimum Wage Commission has again made the change to the minimum wage rates effective from 1 March to align them with the start of the tax year. Government Gazette No. 45882 issued on 7 February 2022 increases the National Minimum Wage rates that are specified in Schedule 1 and Schedule 2 of the National Minimum Wage Act with effect from 1 March 2022. Hourly Minimum Wage rates for the Four categories of workers other than Learners
NATIONAL MINIMUM WAGE
Rate/hour
Rate/hour
Rate/hour
Rate/hour
Worker Categories
1-Jan-19
1-Mar-20
%
1-Mar-21
%
1-Mar-22
%
1
General workers
20.00
20.76
3.8%
21.69
4.5%
23.19
6.9%
2
Farm workers
18.00
18.68
3.8%
21.69
16.1%
23.19
6.9%
3
Domestic workers
15.00
15.57
3.8%
19.09
22.6%
23.19
21.5%
4
Public Works Program workers
11.00
11.42
3.8%
11.93
4.5%
12.75
6.9%
Note that in terms of section 4(3), the minimum wage rate in respect of workers in the extended public works program must be increased proportionately to the adjustment of the national minimum wage for general workers. Increases to Sectoral Determinations
The increase to the NMW rate impacts on wage rates set in sectoral determinations that are higher than the NMW.