Poverty wages – Exceptions and uncertainties concerning the NMWA

Poverty wages – Exceptions and uncertainties concerning the NMWA
08 Mar 2019

With the arrival of 2019, we saw the National Minimum Wage Act No. 9 of 2018 (“NMWA”) come into effect, which has not pleased those who are most affected by it.

The NMWA states that the national minimum wage for each ordinary hour worked is R20. There are, however, the following exceptions to the R20 per hour rule:

  • A farmworker, as defined in the NMWA is “any worker who is employed mainly or wholly in connection with farming or forestry activities, and includes a domestic worker employed in a home, on a farm or forestry environment and a security guard on a farm or other agricultural premises, excluding a security guard employed in the private security industry”, and will now be entitled to a minimum wage of R18 per ordinary hour of work.
  • A domestic worker, as defined in the NMWA is “a worker who performs domestic work in a private household and who receives, or is entitled to receive, a wage” and will receive R15 per ordinary hour worked.
  • A worker who is employed on an expanded public works programme, as defined in the NMWA is “a programme to provide public or community services through a labour-intensive programme determined by the Minister in terms of section 50 of the Basic Conditions of Employment Act and funded from public resources” and are entitled to a minimum wage of R11 per ordinary hour worked.
  • Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act No. 97 of 1998, are entitled to the allowances contained in Schedule 2 of the NMWA.

The NMWA brought about much uncertainty from employers regarding the effects that the NMWA will have on existing employment contracts. In term of section 4 (6) and (7) of the NMWA, the following provisions apply to existing employment contracts:

  • The payment of a national minimum wage cannot be waived, and the national minimum wage takes precedence over any contrary provision in any contract, collective agreement, sectoral determination or law, except a law amending the NMWA; and
  • The national minimum wage must constitute a term of the worker’s contract except to the extent that the contract, collective agreement or law provides a wage that is more favorable to the worker.

This means that all existing employment contracts must be amended to comply with the provisions of the NMWA. Notwithstanding the NMWA having just come into effect, the Congress of South African Trade Unions, as well as other unions, are already pushing for a review of the new national minimum wages in terms of the NMWA, which they describe as “poverty wages”.

The NMWA further provides for a National Minimum Wage Commission (“Commission”) to be formed. The Commission will, annually, review the national minimum wage and make recommendations to the Minister of Labour regarding any changes or adjustments that are required. Until such time as the Commission is up and running, workers and their trade unions will have to make do with the current “poverty wages”.

See also:

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
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