In our bulletin dated 15 February 2021, Amendment to the National Minimum Wage, we set out the amendments to the national minimum wages contained in Schedule 1 and Schedule 2 of the National Minimum Wage Act, 2018, which will take effect from 1 March 2021.

The focus of this second bulletin is on the calculation of the minimum wage in the context of domestic workers. While we deal with the position of domestic workers particularly, similar principles will apply to farm workers.

As previously stated, the national minimum wage per hour for domestic workers in the Johannesburg/Gauteng Areas has been increased to R19,09 with effect from 1 March 2021.

As we explain in this bulletin, it is important that employers take note of how a ‘wage’ is calculated for purposes of the Act: in summary, they must include only that which is paid in money and must exclude other amounts such as meal allowances, transport or accommodation provided.

So, how do the employers of domestic workers (which include gardeners and others working in and around a private household) ensure that they are paying not less than the statutory minimum? What benefits commonly afforded in South Africa to domestic workers may be counted and which are to be excluded for this purpose?

Our law has long recognized a difference between “remuneration” and “wage”. The Basic Conditions of Employment Act, 1997, for example, defines both “remuneration” and “wage” and the concepts are applied in that Act differently and deliberately. The courts have also held that while a “wage” may be part of “remuneration” the converse would not be true. Remuneration may consist of money or kind or both, whereas wage is restricted to money.

The National Minimum Wage Act has to do with “wages”. The purpose of the Act is stated to be, amongst others, to improve the wages of lowest paid workers and to protect workers from unreasonably low wages. Every worker is entitled to payment of a wage in an amount no less than the national minimum wage. Every employer must pay wages to its workers that are no less than the national minimum wage. And wage is defined to mean the amount of money paid or payable to a worker in respect of ordinary hours of work, or if they are shorter, the hours a worker ordinarily works in a day or a week. Unlike the BCEA, there is no mention of “remuneration”.

What then does the Act say about what is to be counted and what is to be excluded in determining whether the worker is receiving not less than the national minimum wage?

Section 5 of the Act states that the calculation of a wage is the amount payable in money for ordinary hours of work excluding –

any payment made to enable a worker to work including any transport, equipment, tool, food or accommodation allowance, unless specified otherwise in a sectorial determination;

any payment in kind including board or accommodation, unless specified otherwise in a sectoral determination;

gratuities including bonuses, tips or gifts; and

any other prescribed category of payment.

From this, it follows that while the provision of accommodation to a domestic worker, or of a food or transport allowance, may form part of that worker’s remuneration, it is not part of that worker’s wage for the purpose of determining whether the worker is being paid not less than the national minimum wage.

Furthermore, a domestic worker must be paid for at least four hours on any day on which he or she works even if in fact he or she works fewer hours than that. Under the Act, a worker is entitled to receive the national minimum wage for the hours that the worker works on any day. This is subject to section 9A of the BCEA. That section stipulates that a worker who works for less than four hours on any day must nevertheless be paid for four hours of work on that day. If a worker is paid on a basis other than the number of hours worked (for example that the worker is paid a weekly or monthly wage), the worker may not be paid less than the national minimum wage for the ordinary hours of work.

“Ordinary hours of work” has the same meaning in the Act as in the BCEA.

An employer may not require or permit an employee or worker to work more than 45 hours in a week and nine hours in any day if the employee works for five days or fewer in a week, or eight hours in a day if the employee works on more than five days in a week.

According to the sectoral determination for the Domestic Worker Sector, South Africa made under the BCEA –

The hourly wage of a domestic worker is obtained by dividing the daily wage by the ordinary hours worked in a day or dividing the weekly wage by the number of ordinary hours worked in a week.

The daily wage of a domestic worker is obtained by multiplying the hourly wage by the number of ordinary hours worked in a day or dividing the weekly wage by the number of ordinary hours worked in a week.

The weekly wage of a domestic worker is obtained by multiplying the hourly wage by the number of ordinary hours worked in a week or multiplying the daily wage by the number of days worked in a week or dividing the monthly wage by four and one-third (13/3).

The monthly wage of a domestic worker is obtained by multiplying the weekly wage by four and a third.
In our next bulletin, we will consider the effect of the recent decision of the Constitutional Court dealing with domestic workers and the Compensation for Occupational Injuries and Diseases Act.

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