Increase to BCEA earnings threshold & minimum wages

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Jacques van Wyk | Director | Werksmans Attorneys | mail me |


 

 

 

 

 

 

 

 


Andre van Heerden | Senior Associate | Werksmans Attorneys | mail me |


On 8 February 2021 the Minister of Employment and Labour, Thembelani Waltermade Nxesi, published a Government Gazette providing for the increase of the earnings threshold, as provided for in the Basic Conditions of Employment Act  (BCEA). The Minister also published a Government Gazette providing for the amendment of the national minimum wages.

Increase to BCEA earnings threshold

The increase of the earnings threshold, as provided for in the Basic Conditions of Employment Act 75 of 1997 (BCEA) will be R211,596.30 per annum with effect of 1 March 2021. 

Earnings is defined as ‘the regular annual remuneration before deductions i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration for the purpose of this notice.’

Employees who earn in excess of the threshold are excluded from certain provisions of the BCEA such as those relating to ordinary hours of work (section 9), overtime (section 10), compressed working weeks (section 11), averaging hours of work (section 12), meal intervals (section 14), daily and weekly rest periods (section 15), pay for work on Sundays (section 16), pay for night work (section 17(2)) and pay for public holidays where the employee works on a day he/she would not ordinarily work  (section 18(3)).

Adjustment of the minimum wages in terms of the National Minimum Wage Act

The amendment of the national minimum wages, as set out in Schedule 1 and Schedule 2 of the National Minimum Wage Act 9 of 2018 will become effective on 1 March 2021.

Subject to the below, the national minimums wage shall be:

  1. R21,69 per ordinary hour worked;
  2. R21,69 per ordinary hour for farm workers; 
  3. R19,09 per ordinary hour for domestic workers; 
  4. R11,93 per ordinary hour for workers employed on an expanded public works programme.

In addition to the rates set out above, specific minimum wage rates are set for:

  1. learnership allowances; 
  2. workers in the contract cleaning sector (ie Sectoral Determination 1); and
  3. workers in the wholesale and retail sector (ie Sectoral Determination 9).

 




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