Updated minimum wage planned for South Africa

The Department of Employment and Labour has confirmed that it will be formalising a new minimum wage for South Africa in the coming financial year.

Presenting its annual performance plan for 2022/2023 to parliament, the department said the investigation into the new minimum wage should be completed by November 2022, with the updated amounts set to be published by 31 March 2023.

The department most recently updated South Africa’s minimum wage on 1 March 2022, with the amount set at R23.19 for each ordinary hour worked, representing an increase of 6.9% from the minimum wage set in 2021.

Unlike in previous years, no specific worker groups have been provided exceptions, with the minimum wages for domestic workers and farmworkers now also set at R23.19 for each ordinary hour worked as part of a planned equalisation. The hike represents a 21.5% increase for domestic workers. Workers employed as part of the expanded public works programme are entitled to R12.75 per hour.

While the 2022 increase was above inflation, 2023’s minimum wage discussions will have to consider record-high fuel prices, growing grocery inflation, and the possibility that government could introduce a formal basic income grant in its 2023 national budget.

The National Minimum Wage Act was first proclaimed in 2018, setting a historic precedent in the protection of low-earning (vulnerable) workers in South Africa and providing a platform for reducing inequality and huge disparities in income in the national labour market.

In terms of the law, it is an unfair labour practice for an employer to unilaterally alter hours of work or other conditions of employment in implementing the national minimum wage.

The national minimum wage is the amount payable for the ordinary hours of work and does not include payment of allowances (such as transport, tools, food or accommodation) payments in kind (board or lodging), tips, bonuses and gifts.

The National Minimum Wage Commission, which typically makes its recommendations in November, considers the following factors when determining the annual adjustment:

• Inflation, the cost of living, and the need to maintain the value of the minimum wage;
• Gross domestic product; wage levels and collective bargaining outcomes; productivity;
• Employers’ ability to carry on their businesses successfully; the operation of small, medium, or micro-enterprises and new enterprises;
• The likely impact of the recommendation adjustment on employment or the creation of employment.

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