The Department of Employment and Labour has alerted the public to the Friday deadline for their input into the review of the National Minimum Wage (NMW).

Written submissions are made to the NMW Commission in line with the National Minimum Wage Act.

The Act seeks to provide a more equitable pay structure that ensures working people do not live in poverty and also provides for exemptions for employers who truly cannot afford the adjustment.

On 28 November 2020, the Commission released a number of reports relating to the annual review and adjustment of the NMW for 2021.

In the reports, the majority of Commissioners recommended that the NMW should be increased by 1.5% over and above inflation as measured by the consumer price index (CPI). The current rate as measured by CPI as of September 2020 was 3%. Therefore, the adjustment should be 4.5 %.

In a statement, the Department said the majority of Commissioners also recommended that the minimum payment for farmworkers be aligned with the national minimum wage this year and that the minimum payment for domestic workers be gradually increased to equal the national minimum wage by 2022.

Considerations

In considering the annual adjustment, the Commission considers inflation, the cost of living, and the need to retain the value of the minimum wage.

Also considered is the gross domestic product; wage levels and collective bargaining outcomes; productivity; and the ability of employers to carry on their businesses successfully.

The operation of small, medium or micro-enterprises and new enterprises; and the likely impact of the recommendation adjustment on employment or the creation of employment are also considered, said the Department.

The National Minimum Wage Act was 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 NMW was first implemented on 1 January 2019 at a level of R20 per hour. On 1 March 2020, the NMW base rate was adjusted to R20.76 per hour.

“In terms of the law, it is an unfair labour practice for an employer to unilaterally alter hours of work or other conditions of employment in implementing the NMW.”

The NMW 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.