The
minimum wage in context
Minimum
wages have been utilised in both developing, and developed, countries for many
years. The introduction of a minimum wage into our law is therefore, from a comparative
perspective, not a novel concept. However, it is new to South African law.
On 3
December 2018 the Minister of Labour, Mildred Oliphant, placed a sectoral
determination in the Government Gazette which provides for the minimum wage payable
to domestic workers. This minimum wage is applicable to all major
municipalities in South Africa.
The
determination distinguishes between domestic workers who work more than 27
hours per week, and domestic workers who work 27 hours per week or less.
Domestic workers whose working hours exceed 27 hours a week must be paid a minimum
wage of R13,69 per hour, R616,03 per week, or R2669,24 per month. On the other
hand, domestic workers working 27 hours per week or less have a minimum wage
set at R16,03 per hour. These workers’ weekly wage is R432,78, while the amount
payable to these workers monthly is R1875,22.
The National
Minimum Wage Act 9 of 2018
The
minimum wage specifications made in respect of domestic workers at the start of
December 2018 form part of a larger scheme of minimum wage determinations, and must
therefore not be viewed in isolation. The sectoral determination in the
Government Gazette states that the minimum wages applicable to domestic workers
apply for the period 3 December 2018 until the promulgation of the minimum wage
provision in the National Minimum Wage Act 9 of 2018 (“Act”).
The Act
was signed into law by President Cyril Ramaphosa and came into effect on 1
January 2019. The Act prescribes a minimum wage of R20 per hour for many of the
country’s employees. R20 per hour equates to R800 per week or R3500 per month.
This amount was reached after considerable research was conducted, and many
arguments advanced to the Advisory Panel (chaired by Prof Imraan Valodia).
According
to the submissions, a rate beneath R20 an hour would do little to alleviate
poverty in our country. The minimum wage applies to farm workers, forestry
workers, domestic workers, welfare workers, and care workers. These categories
of persons have been included on the basis of their particular susceptibility
to disemployment, in addition to long-term unemployment. There are currently
over six million employees earning below R20 an hour in South Africa.
Why a
national minimum wage?
The
Act follows precisely four years after the National Economic Development and
Labour Council (“NEDLAC”) began discussions about protecting employees
receiving minimal income. A primary goal of the minimum wage is, accordingly,
to decrease inequality and attempt to completely eliminate poverty. The minimum
wage is intended to be a working solution which benefits the poor, and is
designed to be an instrument which will close the wage gap.