How much you should be paying your domestic worker in 2021

Employment and Labour minister Thulas Nxesi has published the new minimum wage for domestic workers in South Africa.

In a gazette published on Monday evening (8 February), the minister said that the national minimum wage for domestic worker is now R19.09 for each ordinary hour. This change will take effect from 1 March 2021.

This is still below official national minimum wage will rise to R21.69 for each ordinary hour on the same date.

However, the two amounts are likely to equalise in the coming years as the national minimum wage commission has said that the minimum wage should be applicable to all employees across the country and irrespective of sector.

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%.

What people are actually paying 

While this is the absolute lowest that South African can legally pay their domestic worker, data published by cleaning service SweepSouth in 2020 shows not only a dramatic drop in earnings due to the pandemic, but a continued trend of domestic workers not earning enough to cover their most basic needs.

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 establishment of a national minimum wage was a notable achievement, but it is clear that this is becoming increasingly inadequate to cover even the bare minimum of household expenditure. This has forced many families to take on debt which often spirals out of control.

“With the onset of the Covid-19 pandemic and subsequent lockdown, the majority of workers fell below the R2,500 threshold (74%). Given that their costs have shown no sign of decreasing, this has placed phenomenal pressure on already struggling households.”

A poll of BusinessTech readers conducted on Tuesday (9 February), showed that this data largely aligns with current trends, with most domestic workers earning between R2,500 and R3,500.

Job losses 

While domestic workers could see further increases in 2022, members of the National Minimum Wage Commission have warned 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.

Data published in November 2020 by Statistics South Africa shows that one of the job groups hid hardest by the lockdown are domestic workers, 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 until the end of Q3 2020 (September 2020).

Read: South Africa will announce tax increases in February – but they may not be what you think

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How much you should be paying your domestic worker in 2021