Warning over big change for employees in South Africa coming next week
Legal experts have warned that the new earnings threshold taking effect next Friday (1 May) could have significant financial implications for employers in South Africa.
The Department of Employment and Labour gazetted the changes on Friday, 17 April, pushing the earnings threshold to R269,601 per annum—an increase of around 3%.
The change means any workers whose salaries have increased beyond R22,467 a month in 2026 will lose certain automatic protections under the Basic Conditions of Employment Act (BCEA).
However, legal experts at Werksmans Attorneys noted that the opposite is also true: any workers who now fall below the threshold will gain many more protections.
“This will have real financial consequences for employers,” the firm said.
“An assessment should be conducted by all employers to ensure that the increase and its consequences are accounted for in the workplace.”
Where necessary, the experts said that employers should make changes to employment contracts or remuneration structures in order to mitigate the risks of any unintended contraventions of the BCEA.
This includes provisions applicable to atypical employment arrangements.
According to the DEL, the purpose of the BCEA is to advance economic development and social justice by giving effect to and regulating the right to fair labour practices.
The sections of the BCEA that are impacted by the threshold change relate to:
- Ordinary hours of work;
- Overtime;
- Length of working hours;
- Averaging of hours of work;
- Determination of hours of work by the Minister;
- Meal intervals;
- Daily and weekly rest period;
- Pay for work on Sundays, night work, and public holidays.
The earnings threshold is the level at which workers in South Africa lose automatic protections under the BCEA.
The new threshold equates to just under R22,467 per month, up from R22,100 in 2025.
Any employee who earns above that will lose the automatic protection—and any employee who now falls below the threshold gains it.
Beyond the financial implications of possibly having to pay more overtime and managing more tightly regulated work hours, employers also have to consider other protections.
Legal firm Bowmans expanded on these, noting that the Labour Relations Act affords additional protections to employees earning below the threshold in atypical employment arrangements, including:
- Fixed-term contracts: Where there is no justifiable reason for fixing the term of a contract, such employees may be deemed to be employed indefinitely.
- Labour brokers: Employees placed by a labour broker to work for a client may be deemed employees of the client if they are not performing a ‘temporary service’—for example, working for a period exceeding three months or not replacing an employee who is temporarily absent.
Employers have been warned to ensure they adjust their operations and budgets accordingly.
What are earnings?
According to Werksmans, it is important for employers to understand what “earnings” are in the context of the earnings threshold.
Earnings refer to an employee’s regular annual remuneration before deductions, like income tax, pension, medical and similar payments.
However, they exclude any similar payments made by the employer in respect of the employee.
Subsistence and transport allowances, achievement awards and payments for overtime worked do not count either.
“This is an important distinction because earnings in this context are not the same as remuneration in terms of the Ministerial Determination regulating the Calculation of Employees’ Remuneration,” the firm said.
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