New Minimum Wage in South Africa | It’s Official!

It’s official! President Cyril Ramaphosa has signed the National Minimum Wage Bill into law. Speaking at a ceremony at the Walter Sisulu Square in Kliptown, Ramaphosa announced that the new national minimum wage of R20 per ordinary hour will come into effect from 1 January 2019.

This law will bring about significant changes for employers and employees in South Africa; it should also be seen as an achievement for business, for it demonstrates the commitment of employers to fairer wages and better working conditions.

Purpose of The New Minimum Wage

According to National Minimum Wage Act No. 9 of 2018, the purpose of this Act is to advance economic development and social justice by:

  • protecting workers from unreasonably low wages;
  • preserving the value of the national minimum wage;
  • promoting collective bargaining; and
  • supporting economic policy.

Farm workers, domestic workers, learners employed in terms of the Skills Development Act and workers on expanded public works programmes have different minimum hourly rates which will apply from a date to be fixed by the President.

Calculation of The Minimum Wage

The National Minimum Wage Bill will set the new minimum wage at R20 for each ordinary hour worked.
The amount excludes:

  • any payment made to enable a worker to work including any transport, equipment, tool, food or accommodation allowance;
  • any payment in kind including board or accommodation;
  • gratuities including bonuses, tips or gifts; and
  • any other prescribed category of payment.

Any deduction made, must be in accordance with the Basic Conditions of Employment Act No. 75 of 1997.

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