The National Minimum Wage Commission has published its annual review of the national minimum wage, including a proposal to equalise the wages of domestic workers with other employees.
In its proposal document published on Friday (20 November), the commission recommended that the minimum wage of domestic workers be increased to 88% of the national minimum wage in 2021 and to 100% in 2022.
The commission recommends a CPI+1.5% increase for the NMW in 2021, which at current CPI would see a 4.5% increase, taking the base from R20.76 an hour in 2020 to R21.69 an hour in 2021.
As of March 2020, the minimum wage for domestic workers is at 75% of the base – R15.57 per hour. Under the new proposals, a bump up to 88% of the 2021 base would make the new minimum for domestic workers R19.09 per hour – a monetary increase of 23%.
This adjustment would amount to an increase of about R450 per month for a domestic worker, the commission said, depending on the different payment models. This would again increase in 2022, should the minimum wage for domestic workers increase to 100%.
|National Minimum Wage||100% (base)||75% (current)||88% (proposed)|
While the commission’s recommendation is based on a number of considerations, including the inflation rate and general business conditions, the proposal document also includes a number of dissenting opinions from the business sector which warn that a minimum wage increase could lead to further job cuts.
“Our view as the business representatives on the commission is premised on the need to avoid or minimise negative impacts on jobs in the sectors, especially at a time when the economy is struggling under the weight of multiple factors like Covid-19, sovereign credit downgrades and poor growth outlook for the near term,” the representative said.
The group added that employers of domestic workers are mostly employees themselves in other sectors.
“With most sectors already reducing or maintaining salaries, and retrenchments expected to peak, it is reasonable to expect that employers of domestic workers are going to struggle to either absorb huge wage increases or even keep their employees,” the representatives said.
The representatives said that they are supportive of a general increase in 2021, but warned that additional would be problematic. They instead propose a four-year phase-in period which would allow increases to be more sustainable for employers.
“To induce shocks of double-digit wage increases in these sectors, which are large employers, is likely to result in massive job losses and/or increased non-compliance, both of which scenarios should be avoided where possible.”
The group said that it cannot support a proposal that we know will lead to dramatic job losses in a sector that is already being significantly affected by the Covid-19 pandemic.
Data from Statistics South Africa’s Quarterly Labour Force Survey for the third quarter of 2020, shows domestic workers are one of the groups hit hardest by the lockdown with 259,000 losing their jobs in Q2 2020 – a year-on-year decrease of 25.1%.
This means that the number of active domestic workers in the county decreased from just over a million at the start of 2020, to 745,000 as at the end of June.
However, StatsSA’s latest data shows that the sector has seen a relatively strong rebound, with 119,000 domestic worker jobs added in Q3 2020. This means that the total number of employed domestic workers increased to 864,000 be the end of September.
Despite this improvement. the data shows that a net total of 163,000 domestic workers have lost their jobs since the start of the year.
Domestic work is one of the lowest paid occupations in the country with a minimum wage of R15.57 an hour. However, many households still rely on this income for basic survival.
Data published by digital-booking cleaning service SweepSouth in September shows not only a dramatic drop in earnings due to the pandemic, but a continued trend prior to the lockdown of domestic workers not earning enough to cover their most basic needs, the group said.
While most workers were earning greater than R2,500 (63%) before lockdown, only a small minority (14%) were earning above R4,000 which is generally considered to be a living wage.
The group’s data shows that:
- The average SweepSouth domestic worker earns R3,359;
- The average non-SweepSouth domestic worker earns R2,814;
- Minimum wage is R2,740 (R15.57 an hour).