October 15, 2021

Warning over minimum wage hike for South Africa

The Nationwide Minimum Wage Fee has referred to as for suggestions on a brand new hourly minimum wage for South Africa as a part of its annual evaluation.

Beneath the Nationwide Minimum Wage (NMW) Act, the fee yearly assesses and evaluations the minimum wage. The minister of Employment and Labour, Thulas Nxesi, then determines an adjustment primarily based on these suggestions.

Whereas the federal government has argued that the nationwide minimum wage can be utilized as a software to raise extra South Africans out of poverty, companies have warned that additional hikes could be untenable and result in extra job losses.

That is based on the Nationwide Employers Affiliation of South Africa, which carried out a survey amongst employers to find out what the impact of any potential changes to the NMW shall be on their companies, and the extent of their capability and capability to soak up or stand up to a rise.

Given the present financial local weather in South Africa, the consequences of the Covid-19 lockdown, and the current losses attributable to violent lootings of mid-2021, a rise to the NMW shall be catastrophic to South African companies the economic system generally, the group mentioned.

“The effect of any adjustments to the NMW should not, and cannot be considered lightly. In a country such as South Africa, which is already struggling with unprecedented rates of unemployment, extreme poverty, over-burdened employers and business owners, and a veneer-thin trust in the government and its ability to care for its most vulnerable citizens, and unaffordable NMW will completely maim the already crippled economy, leaving employers, business owners, their employees and their dependents destitute.”

If employers can’t afford a rise, they may haven’t any different selection however to cut back working hours or retrench their staff, it mentioned.

“What government seems to fail to understand is that when one employee is retrenched, it is not only that employee who suffers. In South Africa, we live in a dispensation where one worker is generally the only income generator in a family of four or five people. This means that they would all suffer the consequences of that one employee’s retrenchment.”

The truth that an employer might not appoint an individual at a charge beneath the minimum wage, even with the consent of such an individual, robs a possible worker from incomes at the very least some type of dwelling and condemns him to a lifetime of abject poverty, Neasa mentioned.

“It will behove the federal government to rethink its future stance on rising minimum wages and take heed of the employers’ objections to will increase. Their focus needs to be the avoidance of catastrophic future financial implications for the nation and the rise of unemployment.

“It is time for the government to take a critical view on all the legislative measures, of which the NMW is only one, and determine which deters employment.”

Present minimum wage 

Nxesi launched the latest minimum wage adjustment for South Africa in March, taking the present complete to R21.69 for every atypical hour labored.

As in earlier years, the adjustment supplies exceptions for a number of employee teams, together with:

  • Farmworkers are entitled to a minimum wage of R21.69 per hour;
  • Home staff are entitled to a minimum wage of R19.09 per hour;
  • Employees employed on an expanded public works programme are entitled to a minimum wage of R11.93 per hour.

In its 2020 report, the nationwide minimum wage fee mentioned that ideally, a nationwide minimum wage ought to apply to all staff throughout the nation and regardless of sector.

The fee really useful that the minimum wages of farmworkers be equalised with the nationwide minimum wage with impact from the date of the general adjustment in 2021. It added really useful that the minimum wage of home staff be elevated to 88% of the nationwide minimum wage in 2021 and 100% in 2022.

This adjustment of the minimum wage for home staff and farmworkers would enhance about R450 per thirty days for a home employee and about R350 per thirty days for a farmworker.

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