This would take the minimum wage closer to Rand (R) 23/hour (1,51 $/hour) and see domestic workers earn a minimum wage of more than Rand 20/hour (1,31 $/hour) for the first time.

Under the National Minimum Wage (NMW) Act, the National Minimum Wage Commission (comprising 3 independent commissioners, an independent chairperson, 3 representatives each for Business, Labour and Civil Society) annually assesses and reviews the minimum wage. Then, the minister of Employment and Labour determines an adjustment based on these recommendations.

National minimum wage should be applicable to all employees. However, to avoid excessive disruption the Act established lower minimums for farm and domestic workers, with a process of gradual equalisation to the national minimum wage over time. This phasing in process would take place over two years, starting in 2021. For this reason, all commissioners recommended that the minimum wage for domestic workers be equalised to the national minimum wage in 2022.

The Commission’s report highlights that “The National Minimum Wage Act constitutes a decision to prioritise a more equitable pay structure to ensure that workers do not live in poverty. This decision implies that costs for some employers will increase, although broader benefits to society for more equitable workplaces and remuneration systems may offset this”. In this regard, the report also underlines that the most recent findings from the Department of Employment and Labour’s qualitative research study did not establish that the introduction of the national minimum wage had any influence on the running of businesses, even if more research must be conducted in this area.

Business Unity South Africa (BUSA) initially cautioned against the impact of the equalisation provision, especially in the context of very low economic growth and high unemployment levels, exacerbated by the Covid-19 pandemic. However, other considerations eventually led to a compromise, where BUSA agreed to support the 2021 agreement in the NMWC to equalise wages for domestic workers by 2022 and supports the compromise solution.

Separatly, the National Employers Association of South Africa (NEASA) considers that an increase in the national minimun wage would cause a lot of damages to businesses and the economy in general and the government should “reconsider its future stance on increasing minimum wages and take heed of the employers’ objections to increases”.

The NMWC is currently collating views from the public on the proposed minimum wage increases. The closing date is 14 January 2022. Thereafter the report (including the majority and minority views) will be sent to the Minister of Employment & Labour for his consideration.