In 2025, South Africa implemented significant changes to its labour regulations, notably increasing the National Minimum Wage (NMW) and adjusting the earnings threshold under the Basic Conditions of Employment Act (BCEA). These changes have substantial implications for employers across various sectors. This article delves into these adjustments and their impact on employment practices.
National minimum wage increase: effective 1 March 2025
Effective from 1 March 2025, the NMW increased from R27.58 to R28.79 per ordinary hour worked, reflecting an approximate 4.38% rise. This adjustment applies universally, encompassing sectors such as farmworkers and domestic workers.
Sector-specific minimum wage rates:
- Expanded Public Works Programmes: The minimum hourly rate increased from R15.16 to R15.83.
- Contract Cleaning Services Sector: Metropolitan Councils (including City of Cape Town, Greater East Rand Metro, City of Johannesburg, Tshwane, and Nelson Mandela Bay): Employees are entitled to a minimum hourly rate of R31.69.
- KwaZulu-Natal: Minimum wage rates must align with those stipulated in the Bargaining Council for the Contract Cleaning Service Industry’s collective agreement.
- All Other Areas: Employees are entitled to a minimum hourly rate of R28.89.
These adjustments aim to ensure fair compensation, considering economic indicators and the cost of living.
Adjustment of earnings threshold effective 1 April 2025
The earnings threshold, as determined by the Minister of Employment and Labour under section 6(3) of the BCEA, increased from R254,371.67 to R261,748.45 per annum (approximately R21,812.37 per month) effective 1 April 2025.
Significance of the earnings threshold:
The earnings threshold determines the applicability of certain BCEA provisions. Employees earning above this threshold are excluded from specific protections related to:
- Working hours: Regulations concerning ordinary hours of work, overtime, compressed working weeks, and averaging of hours.
- Rest periods and breaks: Entitlements to meal intervals, daily and weekly rest periods.
- Additional pay: Compensation for work on Sundays, night work, and public holidays.
Employees earning below the threshold retain these protections, ensuring fair labour practices for lower-income workers.
Implications for employers
These regulatory changes necessitate a thorough review of employment practices:
Compliance with the increased NMW:
Wage adjustments: Employers must ensure that all employees, including those in specific sectors like domestic work and farming, receive at least the updated minimum wage of R28.79 per hour.
Budgetary considerations: The wage increase may impact payroll expenses, requiring adjustments in financial planning.
Re-evaluation of employee earnings relative to the new threshold:
Identification of affected employees: Determine which employees now fall below the updated earnings threshold.
Adjustment of employment terms: For employees below the threshold, ensure compliance with BCEA provisions regarding working hours, overtime pay, and related protections.
Review of employment contracts and policies:
Contractual compliance: Ensure that employment contracts reflect adherence to the new wage standards and earnings threshold implications.
Policy updates: Revise company policies to align with the updated regulations, particularly concerning working hours, overtime, and related benefits.
- Engagement with sectoral determinations and Bargaining Councils:
Sector-specific compliance: For sectors with specific minimum wage rates or collective agreements, ensure alignment with the updated standards.
Active participation: Stay informed about sector-specific changes and obligations through your employers’ organisation, which engages with relevant bargaining councils on your behalf.
Conclusion
The 2025 adjustments to South Africa’s National Minimum Wage and earnings threshold underscore the government’s commitment to fair labour practices and the protection of workers’ rights.
Employers must proactively adapt to these changes, ensuring compliance and fostering equitable working conditions. Regular reviews of employment contracts, wage structures, and company policies are essential to align with the evolving regulatory landscape.
By staying informed and responsive to these developments, employers can maintain compliance, promote fair labour standards, and contribute positively to South Africa’s socio-economic growth.