Legislation: President silent on minimum wage exclusions, exemptions

The National Minimum Wage Act will come into effect on 1 January 2019, after which no worker in SA should be paid less than R20 per hour, according to President Cyril Ramaphosa. Announcing this on Friday in Kliptown, Soweto, the President chose not to mention that the minimum wage will not apply to workers in domestic service or in the agricultural and forestry sector – or to those participating in government’s extended public works programmes, notes Pam Saxby for Legalbrief Policy Watch. The Act’s Schedule 1 provides that, from dates yet to be proclaimed, domestic workers will instead be ‘entitled’ to a minimum of R15 per hour and agricultural and forestry sector workers to a minimum hourly rate of R18. The daily minimum wage paid to an extended public works programme participant was increased to R92.31 on 1 November, while a new sectoral determination for domestic workers came into effect on 1 December, as Legalbrief Today has already reported. The new hourly rates for workers in domestic service are below R15 for all categories other than one prescribing R16.03 for anyone working 27 hours or less in a metropolitan or urban area. 

Neither did Ramaphosa refer in his speech to the national minimum wage exemption regulations, which were released in draft form in May. Once finalised, they will determine the circumstances in which an employer could be authorised to pay less than the hourly and monthly amounts prescribed in the Act, as Legalbrief Today has also reported. It is anticipated that an entity’s profitability, liquidity and solvency will inform the outcome of an exemption application. All this notwithstanding, the President said that, ‘far below what we would want workers to earn’, R20 per hour is nevertheless ‘a decisive step towards the achievement of a living wage and a more equal distribution of income and wealth’. ‘In setting the starting level, … social partners (in the National Economic Development and Labour Council) sought to strike a balance – between the need to measurably improve the income of the lowest paid workers and the need to sustain and increase levels of employment,’ Ramaphosa explained, adding that ‘available evidence’ has shown that the new minimum wage will not result in ‘widespread layoffs’. By increasing ‘the earnings of as many as six million working South Africans’, it is expected to ‘contribute to greater consumption and higher demand’, stimulating economic growth and creating more jobs.

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