THE NATIONAL MINIMUM WAGE INCREASE

Amalta Seevnarayan Dhanee | Legal Advisor

With current economic challenges, many South Africans are struggling to make ends meet. There is however some good news!!

The Minister of the Department of Employment and Labour has announced a new minimum wage, which has seen the previous minimum wage being increased by 4.38%.

Effective from 01 March 2025, the national minimum wage will be R28.79 per ordinary hour worked. Whilst this increase offers some relief to many workers, it's important to remember that it still falls below the upper bound poverty line.

The new wage applies to all employees covered by the Basic Conditions of Employment Act 75 of 1997, except for those participating in the Expanded Public Works Programme and those with learnership agreements under the Skills Development Act.

It's also worth noting that the minimum wage does not include additional costs such as transport, food subsidies, and bonuses. In other words, employers can't reduce payment of the minimum wage by providing meals or transportation to employees.

Whilst this increase poses a challenge for small businesses struggling to survive, the situation is not entirely bleak. Employers who cannot afford the national minimum wage can apply for an exemption.

APPLICATION FOR EXEMPTION:

The application process is straightforward and must be completed online via the Department of Employment and Labour’s website.

Employers are required to submit sufficient supporting documents and provide evidence of consultation with their employees and trade union representatives. Additionally, in accordance with the National Minimum Wage Act 9 of 2018, employers must pass the affordability test.

If an exemption is granted, it does not mean that employees will not receive an increase. For a maximum period of twelve months, employers must pay their employees at least 90% of the national minimum wage. Furthermore, the exemption certificate must be displayed in the workplace and copies must be provided to the affected employees and trade union representatives.

The prescribed minimum wage and the exemption process aims to balance the needs of employees and employers. Whilst the minimum wage seeks to ensure a basic standard of living for workers, the exemption provides a necessary relief mechanism for employers who genuinely cannot afford the increased wage. This approach aims to support both the workforce and businesses during challenging economic times.