Big pay changes hitting South Africa tomorrow

Legal experts have warned businesses to remember the new National Minimum Wage (NMW), which will take effect on Saturday, March 1, 2025.

The Department of Labour announced the new NMW at the start of February, gazetting a 4.4% increase in the going rate to R28.79 per hour.

This applies to domestic workers and farm workers in the country. The only workers broadly exempt from the rate are those on the extended government works programme, who are on R15.83 per hour.

Legal experts have warned that employers cannot make unilateral changes to work hours or other benefits to avoid paying the new rates.

There are also ‘bare minimums’ at play that set an absolute minimum that any worker can be paid a day.

The NMW translates to a weekly minimum wage of R1,295.55 (45-hour work week) and a monthly minimum of R5,613.62 (4.3 weeks) in most jobs.

However, the laws stipulate that workers must be paid for a minimum of four hours a day, even if they work for fewer hours than this.

This is the equivalent of R115 per day for a person working for four hours or less.

Failure to comply with the laws could result in fines and other penalties, with the added warning that the Department of Employment and Labour is bolstering its inspection capacity and efforts.

Minimum wages for ‘atypical’ workers

While the NMW is straightforward for employees who earn per hour or with set pay structures, employment law experts at Webber Wentzel said things can get more complicated for other types of workers, like commission earners.

Commission-based pay involves workers earning income through selling products on behalf of a store or brand. In some cases, this could result in nil pay.

This payment model is pretty common in the retail sector, such as with cosmetic companies, clothing stores, furniture retailers, and electronics chains.

However, Webber Wentzel said that commission earners still fall within the definition of “worker” in the National Minimum Wage Act and are thus entitled to be paid the minimum wage.

“However, challenges arise when determining compliance with the Act for remuneration not based on hours worked, such as sales-based earnings,” it said.

Results-based pay structures are usually a draw for workers looking for supplemental income outside of traditional work environments.

Caregivers, stay-at-home parents or gig workers may tap into these streams for extra income.

Employers also favour these payment structures because pay is directly linked to measurable outputs like sales—no sales, no pay.

Webber Wentzel said that the NMW Act stipulates that any worker paid on a basis other than the number of hours worked must still receive the minimum wage for the ordinary hours of work permitted in terms of the Basic Conditions of Employment Act.

This mandates that workers be paid for a minimum of four hours, even if they work fewer hours on a given day.

“This implies that if a worker earns based on sales volume but makes no sales in a day, they must still receive at least four hours’ worth of the minimum wage,” the firm said.

The firm said that it may be difficult for commission-based salespeople to prove that they worked for a specific employer if they have no sales to show for it.

Nevertheless, it remains the employer’s responsibility to ensure that their remuneration policies align with the NMW Act.

“Given that commission structures and working arrangements vary across the retail industry, there is no one-size-fits-all approach for commission earners remunerated on a basis other than hours worked.

“Retail employers are nonetheless encouraged to review their remuneration structures to ensure compliance with the NMWA, particularly where no justifiable reason exists to depart from its objectives,” it said.