On 8 February 2021, two significant developments took place in the employment law arena.

New earnings threshold

First, the so-called “earnings threshold” has been increased for the first time since July 2014.

The increase in the threshold will mean that from 1 March 2021, some employees who earn more than ZAR205 433.30 but less than ZAR211 596 per year may be entitled to additional protections that they were not previously enjoyed, such as payment for overtime, compulsory breaks and rest periods, night work allowances and the like.

Labour minister Thulas Nxesi has also published the new minimum wage for South Africa.

New minimum wage

In a gazette published on Monday evening (8 February 2021), the minister said that the national minimum wage is now R21.69 for each ordinary hour. This change will take effect from 1 March 2021.

Thus, the national minimum wage will change from ZAR20.76 per hour to ZAR21.69 for each ordinary hour that an employee works. This is an increase of approximately 4.9%. All sectors will be subject to the new national minimum wage.

The gazette also provides exceptions for a number of worker groups, namely: –

• Farmworkers are entitled to a minimum wage of R21.69 per hour;

• Domestic workers are entitled to a minimum wage of R19.09 per hour;

• Workers employed on an expanded public works programme are entitled to a minimum wage of R11.93 per hour.

The National Minimum Wage Act was first proclaimed in 2018, setting a historic precedent in the protection of low-earning (vulnerable) workers in South Africa and provided a platform for reducing inequality and huge disparities in income in the national labour market.

The national minimum wage was first implemented on 1 January 2019 at a level of R20 per hour. On 1 March 2020, the minimum wage base rate was adjusted to R20.76 per hour.

The national minimum wage is the amount payable for the ordinary hours of work and does not include payment of allowances (such as transport, tools, food or accommodation) payments in kind (board or lodging), tips, bonuses and gifts.