Minimum wage warning for employers in South Africa

South Africa will have a new minimum wage from 1 March 2025, and employers could face severe consequences if they don’t pay their employees the legal requirement.

The new national minimum wage will be adjusted to R28.79 for each ordinary hour worked, marking a 4.39% increase from R27.58 in 2024.

The new adjusted national minimum wage applies equally to farm workers and domestic workers, who, until 2022, had a differentiated national minimum wage.

Workers who are part of the expanded public works programme will earn a minimum wage of R15.83 per hour, an increase from R15.16 in 2024.

Adjustments were also made to the minimum wages for workers in the contract cleaning sector, as well as the wholesale and retail sectors. These are reflected in the sectorial determinations.

Dakalo Singo, Bankey Sono and Neo Sewela from Werksmans Attorneys said that the increases follow a mandatory annual review process by the National Minimum Wage Commission.

“The effect of a statutory national minimum wage is that employers may not pay workers wages that fall below the abovementioned adjusted wage thresholds,” said the experts.

“Importantly, the payment of a national minimum wage cannot be waived as it takes precedence over any contrary provision in any contract, collective agreement, sectoral determination or law.”

The National Minimum Wage Act makes provisions for exemptions in certain circumstances.

To apply for these exemptions, employers will need to apply to the Department of Employment and Labour.

If an employer fails to pay the prescribed national minimum wage, the affected employee can institute a claim for failure to pay any amount owing in terms of the National Minimum Wage Act.

A fine may also be imposed on an employer who fails to pay a worker or employee less than the prescribed national minimum wage.

Thus, employers and workers must ensure that they are aware of any adjustments to the national minimum wage and that they comply with any prescribed amounts.

What else not to do

The Department of Employment and Labour previously warned that there will be increased labour inspections in 2025, meaning that businesses should review their wage structures to avoid any enforcement action.

Legal experts at Webber Wentzel said that the increase in the inspector workforce enhances the department’s ability to conduct thorough audits and inspections across the country.

The department also warned employers that it is seen as an unfair labour practice to unilaterally alter the work hours or any other conditions of employment to circumvent the national minimum wage.

A study from the University of Cape Town found that reducing work hours was one of the go-to tactics used by employers to avoid the increased costs of the national minimum wage.

Moreover, a subset of employers respond to the higher national minimum wage by increasing wages, but not to the legally required level.

The Department noted that every worker is entitled to payment of a wage that is not less than the national minimum wage.

A common example of employees being underpaid involves domestic workers. Data from SweepSouth showed that the average monthly wage was only R3,349 per month for women and R3,059 for men.

This is far less than the R5,600 that full-time domestic workers should be earning.