The new annual earnings threshold is the employee’s regular yearly remuneration before the deduction of income tax, pension, medical aid, and similar payments, but excluding equal payments/contributions made by the employer in respect of the employee.

Employees currently earning between ZAR18 673 per month and ZAR20 093 per month, from 1 March 2023, joined the category of “vulnerable” workers who are entitled to additional rights and protections according to the Basic Conditions of Employment Act, 1997 (“BCEA”).

All those earning below the threshold are subject to the provisions of the BCEA dealing with hours of work, overtime, compressed working week, averaging of hours, meal intervals, daily and weekly rest periods, pay for work on Sundays, night work and work, on public holidays.

This change to the threshold is very likely to impact employers’ profits, as they have to provide employees with these minimum conditions and will need to comply, whatever the cost.

Moreover, the Labour Relations Act (LRA) protects employees through fixed-term or part-time employment contracts and employees provided to clients by labour brokers who earn below the earnings threshold.

In addition to the earnings threshold, the Minister also significantly increased the national minimum wage, the lowest floor for wages every worker is entitled to. 

The minimum wage cannot be varied by contract, collective agreement, or law except to the extent that an employee’s contract of employment, a collective agreement, or law provides for a more favourable wage. 

As in previous years, the minimum wages to be applied are different for several working groups. For example, domestic and farm workers are entitled to the national minimum compensation of ZAR 25.42. At the same time, exceptions are still made for workers employed on an expanded public works programme and workers who have concluded learnership agreements.

Employers must ensure their employment contracts and policies align with the new threshold and national minimum wage.