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New minimum wage and new earnings threshold

On the 7th February 2022 and 8th February 2022, two significant developments took place in the Employment Law arena, these are as follows: –

New Earnings Threshold

The new earnings threshold, on the 8th February 2022 the Minister of Employment and Labour announced that the earnings threshold has been increased. Previously, the earnings threshold was R211 596.30 per year, which equated to approximately R17 633 per month. As from 1 March 2022 the new earnings threshold will be R224 080.48 per year, which is approximately R18 673.37 per month.

It should be noted that earnings include the employee’s regular annual remuneration before deductions, but excludes benefits such as subsistence and transport allowances, achievement awards, and payments for overtime worked. Employees who earn more than the earnings threshold per annum are excluded from protection of certain sections of the Basic Conditions of Employment Act, these being S9, S10, S11, S12, S14, S15, S16, S17.2 and S18.3.

This increase in the threshold would mean that from 1 March 2022 some employees who earn more than R211 596.30 but less than R224 080.48 per annum may be entitled to additional protection such as overtime payments when working more than 45 hours per week, compulsory breaks, and rest periods, nightwork allowances, and the like.


Increase in the National Minimum Wage

Increase in the National Minimum Wage, the Minister of Employment and Labour has also announced increases in the National Minimum Wage and various Sectoral Determinations. These increases also are effective from the 1st March 2022.

The National Minimum Wage will change from R21.69 for each ordinary hour that an employee works to R23.19 for each ordinary hour that an employee works. This is increase of R1.50 per hour. It is important to note that farm workers and domestic workers will also be entitled to the same National Minimum Wage. However, workers employed on an expanded public works program are entitled to R12.75 per hour.

Sectoral Determinations have also been made for the Contract Cleaning Sector and Wholesale and Retail Sector. Employees in these Sectors will be required to increase the minimum wages too. In addition, workers who have concluded learnership agreements are entitled to certain allowances as set in addition to the Government Gazette.