The Minister of Labour has determined that from 1 March 2023, the earnings threshold under the Basic Conditions of Employment Act, 1997 increased from R224 080.48 per annum (approximately R18 673.37 per month) to R241 110.59 per annum (approximately R20 092.55 per month).

The national minimum wage increased from R23.19 per hour to R25.42 for each ordinary hour worked.

“Earnings” is defined in the BCEA as the regular annual remuneration before deductions i.e. income tax, pension, medical aid and similar payments but excluding similar payments made by the employer in respect of the employee. Subsistence and transport allowances received, achievement awards and payments for overtime worked are not regarded as “earnings” for the purpose of the earnings threshold.

The earnings threshold affects the application of a number of provisions of the BCEA. Employers who engage employees at a rate below the threshold must comply with the following provisions:

  • Section 9 – hours of work;
  • Section 10 – overtime;
  • Section 11 – compressed working week;
  • Section 12 – averaging of hours;
  • Section 14 – meal intervals;
  • Section 15 – daily and weekly rest periods;
  • Section 16 – pay for work on Sundays;
  • Section 17(2) – night work; and
  • Section 18(3) – public holidays on which the employee would not ordinarily work.

The change to the BCEA earnings threshold affects other aspects of employment and labour legislation, including:

  1. The presumption of employment under sections 198A of the Labour Relations Act, 1995 and section 83A of the BCEA; and
  2. The additional protections afforded to employees engaged on fixed-term contracts, through temporary employment services, or on a part-time basis in terms of sections 198A, 198B and 198 C of the LRA.

It is important for employers to identify those employees earning below and above the earnings threshold, because those who earn below the threshold are afforded more extensive protection in terms of labour legislation and qualify for certain minimum payments such as overtime pay and pay for work on Sundays and public holidays.

Should employees earning below the threshold be refused or denied the above protections or be paid below the national minimum wage, they may refer a dispute to the CCMA in terms of section 73A of the BCEA. Non-compliance with the BCEA may also attract a fine.

The increase of the national minimum wage increased from R23.19 per hour to R25.42 is not applicable to employees working on an expanded public works programme and workers engaged through learnership agreements. Their minimum wages and allowances have been increased, as have the minimum wages for employees in the contract cleaning and the wholesale and retail industries, at different rates.

Employers are encouraged to monitor these changes to the earnings threshold (usually published in February each year) and to the national minimum wage.

Zaid Majiet and Verushka Reddy