ETI – LEGISLATION BREAKDOWN IN SIMPLE TERMS

3. Wage Regulating measure compliance in terms of ETI:
The following test must be satisfied to determine if the eligible employer comply with the wage regulating measures as prescribed –
a) Is the amount paid to the specific employee NOT lower than the HIGHEST of-
(i) A wage regulating measure (if applicable); AND
(ii) The National Minimum Wage;
OR
b) If the above a)(i) is not applicable (e.g. there is no wage regulating measure AND the employer is exempt from paying the national minimum wage) –
(i) An amount NOT LESS than R2000 if the employee was employed and paid for AT LEAST 160 hours in the specific month.
(ii) An amount NOT LESS than R2000 ÷ 160 x hours employed and paid if the employee was NOT employed and paid for AT LEAST 160 hours in the specific month.

Wage Regulating measure is either a —
• Collective agreement (section 23: Labour Relations Act); or
• Sectoral Determination (section 51: Basic Conditions of Employment Act); or
• Binding Bargaining Council Agreement including extended agreements (section 31: Labour Relations Act).
Hours is the ordinary hours as defined in section 1 of the Basic Conditions of Employment Act. A SARS Private Opinion issued the Payroll Authors Group of SA (PAGSA) state the following:
• Wage is the amount of “money” paid or payable to an employee in respect of ordinary hours of work; if they are shorter, the hours an employee ordinarily works in a day or week. The term “money” means that wage can be an amount paid in cash (i.e. appears on the earning side of the payslip) and does not include payments in kind (e.g. benefits or employer paid contributions).

Section 4 of the ETI Act refers to the “higher of” a wage regulating measure or the National Minimum Wage(NMW). Therefore, if an employee is subject to a wage regulating measure that is lower than the NMW, the NMW must be used as the qualifying criteria.