The following is news flash 2024/03 published by the PAGSA on February 12, 2024 regarding Increase to the National Minimum Wage (NMW) rate

INCREASES TO THE NATIONAL MINIMUM WAGE RATES

NMW Commission

Amongst other matters, the National Minimum Wage Act (NMW Act) establishes the 13-person National Minimum Wage Commission and tasks it with the duty to every year investigate and review the impact of the national minimum wage rates on our economy.

Of general interest is that the first four-year term of the NMW Commission appointed in January 2019 in terms of the NMW Act came to an end on 31 January 2024, and the second NMW Commission has now been appointed.

Professor Adriaan van der Walt has been replaced by academic and economist Professor Imraan Valodia as the Chairperson of the new Commission and he is also one of the four independent experts that make up the 13-member Commission. The other twelve members of the Commission represent organised business, organised community, and organised labour.

After evaluating the impact of the national minimum wage rates against a list of seven economic factors during the year (of which unemployment is arguably the most important), the NMW Commission then recommends increases (or decreases, or no change) to the wage rates specified in Schedules 1 and 2 of the NMW Act to Government for consideration.

This year, the final decision by the Government was announced in a media release issued on 3 February 2024 by the Minister of Employment and Labour.

While the new hourly rates have not yet been confirmed by a notice in the Government Gazette, they can be relied on and are effective from 1 March 2024.

The National Minimum Wage Rates

The following table lists a history of the increases since January 2019 and the new minimum wage rates for the four categories of workers other than learners that are focused on by the NMW Act.

National Minimum Wage Hourly rates for the Four Categories of Workers other than Learners
NATIONAL
MINIMUM WAGE Rate/hr Rate/hr Rate/hr Rate/hr Rate/hr Rate/hr
Worker Categories 1-Jan-19 1-Mar-20 1-Mar-21 1-Mar-22 1-Mar-23 1-Mar-24
General workers 20.00 20.76 (3,8%) 21.69 (4,5% 23.19 (6,9%) 25,42 (9,6%) 27,58 (8,5%)
Farm workers 18.00 18.68 (3,8%) 21.69 (16,1%) 23.19 (6,9%) 25,42 (9,6%) 27,58 (8,5%)
Domestic workers 15.00 15.57 (3,8%) 19.09 (22,6%) 23.19 (21,5%) 25,42 (9,6%) 27,58 (8,5%)
Public Works workers 11.00 11.42 (3,8% 11.93 (4,5%) 12.75 (6,9%) 13,97 (9,6%) 15,16 (8,5%)

The new hourly minimum wage rate of R27,58 per hour translates into a weekly wage of R1 103,20 for an 8-hour per day, 5-day week, and in turn this equates to a monthly minimum wage of R4 780,53.

The table of weekly wage rates per NQF level for learners in terms of the Skills Development Act is not yet available and will presumably be published later this month in the Government Gazette that confirms the new hourly minimum wage rates. As a guideline, in the past the same increase percentage (8,5%) that is applied to the hourly minimum wage rates for the worker categories has also been applied to the weekly minimum wage rates for learners.

Already available on the Department of Labour’s web site are the new minimum wage rates for employees employed in the Contract Cleaning and Wholesale and the Retail sectors that have also been increased.

Increase Percentage

As can be seen from the above table, the increase from 1 March 2022 to 1 March 2023 was a hefty 9,6%.

This year’s increase of R2,16 per hour from R25,42 to R27,58 represents a percentage increase of 8,5%.

While this is less than the previous year’s 9,6%, it is still considerably higher than the year-on-year Consumer Price Increase of 5,1% that was published in January 2024.

This indicates the continued intention of the Government to increase the minimum hourly wage rates at a rate higher than the cost of living to create better living conditions and to improve the financial position of low-income workers.

However, for employers, especially those that operate on slim margins, the increase in wage costs is a serious concern and is likely to result in a review of current financial strategies, business models, pricing mechanisms, and levels of employment.

Concept of Wage for the purposes of the NMW Act

Note that it is an unfair labour practice for an employer to unilaterally change working hours or other employment conditions(such as the wage rate) to comply with the national minimum wage rates specified from year-to-year in terms
of the NMW Act.

According to the Department of Labour’s media release:
“The [wage] amount does not include payment of allowances (such as transport, tools, food or accommodation) payments in kind (board or lodging), tips, bonuses and gifts among others.”

Resulting from a recent Labour Appeals Court Judgement regarding the calculation of ‘wage’, the concept and application of ‘wage’ for the purposes of the NMW Act will be discussed in considerable detail in a PAGSA Newsflash that will be issued shortly.

Regards,

Rob Cooper