As you may be aware, with effect from 01 March 2024, the National Minimum Wage (“NMW”) was increased from R 25.42 to R 27.58 for each ordinary hour worked. This increase is applicable to farm workers and domestic workers, and where an employee, other than an employee employed on an expanded public works programme or a learnership programme earn below this national minimum, their hourly rate of pay must be increased to meet the new NMW.
NMW VS the Earnings Threshold in the BCEA: Is there a difference?
Yes, there is a difference between the NMW and the Earnings Threshold provided for in the Basic Conditions of Employment Act, 75 of 1997 as amended (hereinafter referred to as the “BCEA”).
Another increase effected by the Minister of Employment and Labour is an increase in the BCEA Earnings Threshold. The previous threshold amount of R 241 110.59 per annum, was increased to R 254 371.67 per annum with effect from 1 April 2024. The increase equates to a monthly threshold salary of approximately R21 197.64 per month.
The main difference between the NMW and the BCEA Earnings Threshold, is that the BCEA Earnings Threshold does not establish a minimum rate of pay like the NMW. Instead, it determines the threshold at which employees are excluded from certain benefits prescribed by the BCEA and certain protections under the Labour Relations Act, 66 of 1995, as amended (hereinafter referred to as “the LRA”).
List of exclusions under the BCEA for employees earning above the BCEA Earnings Threshold:
Chapter Two (2) of the BCEA – Regulation of Working Time (exclusions provided for in terms of section 6 (3) of the BCEA):
- Section 9 – regulates ordinary hours of work;
- Section 9A – regulates the daily payment of employees who work less than four (4) hours a day;
- Section 10 – regulates overtime;
- Section 11 – regulates the compression of working hours;
- Section 12 – regulates the averaging of working hours;
- Section 14 – regulates meal intervals;
- Section 15 – regulates daily and weekly rest periods;
- Section 16 – regulates the payment for work on Sundays;
- Section 17 (2) – regulates night work compensation and transportation for nightshift employees; and
- Section 18 (3) – regulates the payment for work on public holidays for employees who do not ordinarily work on public holidays.es, there is a difference between the NMW and the Earnings Threshold provided for in the Basic Conditions of Employment Act, 75 of 1997 as amended (hereinafter referred to as the “BCEA”).
Please note that, section 7(1) of the BCEA is the only section in Chapter Two which the exclusion does not apply to. In terms of section 7(1)employers are required to regulate the working time of each employee – in accordance with the Occupational Health and Safety Act 85 of 1993, as amended; with due regard to the health and safety of employees; with due regard to the Code of Good Practice on the Regulation of Working Time; and with due regard to the family responsibility of employees, irrespective of how much the employee earns.
Chapter Ten (10) of the BCEA – Monitoring, Enforcement and Legal Proceedings:
- Section 70 – contains limitations on the powers of labour inspectors to issue compliance orders; and
- Section 73A – concerns the rights of employees to refer disputes to the Commission for Conciliation, Mediation and Arbitration (CCMA) for an employer’s failure to pay any amount owing to that employee.
Chapter Eleven (11) of the BCEA – General Provisions:
- Section 83A (1) – contains the presumption as to who is employee.
List of exclusions under the LRA for employees earning above the BCEA Earnings Threshold:
Chapter IX – Regulation of Non-Standard Employment and General Provisions:
- Section 198A – regulates temporary services;
- Section 198B – regulates fixed-term contracts;
- Section 198C – regulates part-time employment; and
- Section 200A – contains the presumption as to who is an employee.
Another distinguishing factor between the NMW and BCEA Earnings Threshold is that the NMW applies to all workers, whereas the BCEA Earnings Threshold applies to all employees. Section 1 of the National Minimum Wage Act 9 of 2018, as amended, defines “worker” as any person who works for another and who receives, or is entitled to receive, any payment for that work whether in money or in kind. The broad definition may therefore include an array of workers, including independent contractors.
Conversely, the BCEA explicitly excludes independent contractors in its definition of “employee”. In accordance with section 1 of the BCEA, an employee is any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration; and any other person who in any manner assists in carrying on or conducting the business of an employer. The BCEA Earnings Threshold is therefore not applicable to independent contractors, unlike the NMW.
Links to both the 2024 National Minimum Wage Notice and 2024 BCEA Earnings Threshold Notice are embedded herein.
If you are unsure about the effects of the aforementioned increases on you or your business, do not hesitate to reach out to our offices for a consultation.