The panel appointed to advise on the level at which the country’s national minimum wage should be set, has proposed that this amount should be ZAR3500.00 per month (ZAR800 per week; or ZAR20 per hour). The proposal is one of a number of measures aimed at seeking to ensure stability in the labour market, by reducing income poverty and inequality.
The proposal has been presented to the National Economic Development and Labour Council (NEDLAC), a statutory body, which aims to reach consensus between social partners on policy and legislation, before such legislation is submitted to parliament for approval. The current hope is for the necessary enabling legislation to be enacted around July 2017. The chairperson of the panel of advisors has notified NEDLAC that 47% of those who currently work, earn less than this proposed minimum wage amount.
There is currently no national minimum wage in South Africa. In many industries, minimum wages and are set through a process of collective bargaining, normally under the auspices of various industry-specific bargaining councils. In addition, 10 sectoral determinations provide compulsory minimum wage levels in a number of the traditionally more vulnerable industries (e.g. farm workers, domestic workers and the retail industry).
The current proposal would see a 2-year phasing-in period, with no fines for non-compliance being issued until 2019, possible exemptions/lengthier phasing-in periods for small businesses, and certain other exemptions (the recommendation for 2017 is that only 90% of the minimum wage should be implemented for farm workers and 75% for domestic workers).
The proposals have been met with mixed reactions: on the one hand, trade unions, and indeed many social commentators are concerned that the amount of ZAR3500.00 per month is still far from what could be considered a “living wage” in South Africa; while Business has cautioned that the increases which the national minimum wage would entail, would likely lead to widespread job losses, as firms grappled to cope with the increased cost of labour.