Big change for employees in South Africa from tomorrow – what you need to know

South Africa’s new earnings threshold comes into effect from Wednesday (1 March), which will see many employees in the country lose automatic protections under the Basic Conditions of Employment Act (BCEA).

As of 1 March 2023, South Africans will see the implementation of the increased annual earnings threshold determined by the Minister of Employment and Labour. The new threshold is set to R241,110.59 a year, or approximately R20,092 a month.

According to legal experts from Cliffe Dekker Hofmeyr (CDH), in terms of the BCEA, employees earning in excess of the earnings threshold are excluded from the provisions which regulate:

• Ordinary hours of work;
• Overtime;
• Compressed working weeks;
• Averaging of hours of work;
• Meal intervals;
• Daily and weekly rest periods;
• Sunday pay;
• Pay for night work; and
• Pay for work on public holidays.

On top of provisions in the BCEA, the new threshold will also impact other areas of labour law, the legal experts said.

With regards to the Labour Relations Act (LRA), employees earning in excess of the earnings threshold are not subject to provisions around labour brokers and being deemed employees for purposes of the LRA.

In addition tot his, employees earning in excess of the earnings threshold fall outside the scope of the provisions relating to fixed-term employees who are deemed to be employed indefinitely after three months (in the absence of justifiable reasons for fixing the term of the contract).

Looking at the Employment Eequity Act, an employee earning in excess of the earnings threshold, who has a dispute under Chapter II of the EEA relating to unfair discrimination, is not permitted to refer the dispute to the CCMA for arbitration , unless the dispute relates to alleged unfair discrimination on the grounds of sexual harassment, or the parties all agree to arbitration.

In these cases, employees are obliged to refer the dispute to the Labour Court for adjudication.

The sections covered in these acts are intended to protect vulnerable employees and regulate, amongst other things, hours of work, overtime, work over weekends, lunch breaks and even where labour disputes need to be handled.

Employees earning under this threshold enjoy the full protection of the BCEA, and can, for example, demand overtime pay at a rate of 1.5 times, or legally refuse to do more than the 45 hours of work a week.

What are earnings?

For purposes of determining whether an employee earns in excess of the earnings threshold, “earnings” means an employee’s regular annual remuneration:

• Before the deduction of income tax;
• Before the deduction of pension fund contributions;
• Before the deduction of medical aid contributions and similar payments;
• Excluding similar contributions made by the employer in respect of the employee.

This is subject to the proviso that subsistence and transport allowances received, achievement awards and payments for overtime worked do not fall within the scope of remuneration.

Read: If you earn more than this a year – South Africa’s labour laws won’t automatically protect you