How much you will be fined for not paying minimum wage – and other labour laws coming into effect in the new year

The National Minimum Wage Act and the Labour Relations Amendment Act were officially gazetted on Wednesday (12 December), with both pieces of legislation now set to come into effect from 1 January 2019.

The National Minimum Wage Act (NMWA) aims to address the income disparities in the South African labour market by introducing a national minimum wage.

Read together with certain sections of the Basic Conditions of Employment Amendment Act, the NMWA states that employees will be entitled to R20 for each ordinary hour worked.

Different hourly rates apply to agricultural/farm workers (R18 per hour) and domestic workers (R15 per hour).

An explanatory note published by legal firm Cliffe Dekker Hofmeyr also notes that the NMWA establishes the National Minimum Wage Commission.

The Commission will be responsible for reviewing the national minimum wage on an annual basis.

In deciding on the annual adjustment, the following factors will be considered:

  • Cost of living;
  • Minimum living levels;
  • Alleviation of poverty;
  • Wage differentials and inequality;
  • Conditions of employment;
  • Health, safety and welfare of workers;
  • Employment levels;
  • Inflation;
  • Gross Domestic Product growth;
  • State of collective bargaining.

After the review process is complete, the Commission will be responsible for submitting written recommendations to the Minister of Labour regarding the proposed adjustment.

Employers who fail to pay employees in line with the NMWA may be subject to a fine.

The fine is calculated per employee as the greater amount of double the value of the underpayment or double the employee’s monthly wage.


The Labour Relations Amendment Act

The Labour Relations Amendment Act (LRAA) changes various provisions of the Labour Relations Act – most of which will impact collective bargaining.

The LRAA provides for the following:

  • Extension of bargaining council agreements to non-parties by the Minister of Labour;
  • Extension of funding agreements of bargaining councils;
  • Picketing through collective agreement or through prescribed picketing rules;
  • Extension of the meaning of ballot for a strike or lock-out to include a secret vote;
  • Creation of an advisory arbitration panel.

Under the LRAA, an advisory arbitration panel has been established to resolve strikes (or lockouts) that are obstinate or violent.

The panel may also intervene if there is potential for the strike (or lockout) to cause a local or national crisis.

It will have the power to investigate the cause and circumstances of the strike (or lockout) and release an advisory arbitration award to assist the parties in resolving the dispute.


Read: Economic predictions for South Africa in 2019

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How much you will be fined for not paying minimum wage – and other labour laws coming into effect in the new year