Big change for employees in South Africa next month

Legal experts say the pool of “protected” employees in South Africa could expand next month, with the national earnings threshold being lifted to R261,748 per annum.

The earnings threshold represents the point at which employees are protected by the Basic Conditions of Employment Act (BCEA), as well as provisions in the Labour Relations Act (LRA) and Employment Equity Act (EEA).

Employees earning above the threshold—which equates to around R21,800 per month—are not entitled to certain protections afforded to those earning below it.

According to legal experts at Webber Wentzle, the purpose of the threshold is to ensure greater protection for more vulnerable employees earning below a specified income.

“The increase in the threshold is a noteworthy development, as it may expand the number of employees entitled to stricter protections under labour legislation, such as overtime pay,” the firm said.

The threshold increase amounts to just under R7,400 for the year, or a 2.9% increase from 2024, in line with inflation.

While most businesses tend to give inflation-linked increases to salaries each year, Webber Wentzel warned that any employer that has not hiked wages in line with inflation may now have more employees who qualify for BCEA protections.

“Employers may face financial implications, as they may now be required to comply with additional BCEA protections for employees who now fall below the new threshold,” it said.

“Employers should take heed of the new threshold, as understanding which employees fall below it is essential to minimising the risk of non-compliance with the BCEA.”

The protections under the BCEA relate to regulating ordinary hours of work, overtime, meal intervals, daily and weekly rest periods, Sunday pay, night work pay, and public holiday pay.

Employees earning above the threshold are not automatically protected under these provisions and typically have to negotiate these with their employers.

Employees earning above the threshold are also precluded from referring unfair discrimination disputes under the EEA to the Commission for Conciliation, Mediation, and Arbitration (CCMA) unless the dispute relates to sexual harassment or all parties agree to arbitration.

Webber Wentzel said that such disputes must instead be referred directly to the Labour Court for adjudication.

What counts as earnings?

The definition of ‘earnings’ to calculate whether an employee falls above or below the threshold, refers to an employee’s gross annual remuneration before deductions, including tax, UIF, medical aid, and pension contributions.

Notably, ‘earnings’ in this context differs from the definition of ‘remuneration’ under the Ministerial Determination on the Calculation of Employee’s Remuneration in terms of section 35(5) of the BCEA, the legal experts noted.

Further, employers who use “atypical” employment arrangements—such as commission-based earning, gig earning or piece/causual work—should also review these arrangements to ensure ongoing compliance with the BCEA and avoid consequences.

This is in addition to the new National Minimum Wage requirements, which also pose risks to employers of atypical workers.

Legal firm Cliffe Dekker Hofmeyr highlighted a recent court case involving a company that tried to shirk its duties in paying casual workers.

The ultimate message in the case was that employers cannot implement ‘creative’ ways to get around paying the National Minimum Wage to workers.

The NMW and BCEA apply to all workers, with few exceptions.

In terms of these two laws, even where a worker works for less than four hours on any day, they must be paid for four hours’ work on that day if they earn below the new earnings threshold.

From March 2025, this equates to a minimum of R115.