Today's Labour News

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earningsCity Press reports that a large part of the SA economy will be exempted from the new national minimum wage (NMW), which came into effect last week.  

Final regulations on exemption from the NMW were released quietly on 19 December, cutting the wage floor from the much publicised R20 an hour to R18 an hour for qualifying companies.  The threshold for qualifying for exemption was set too low, according to organised labour.  At the same time, organised business criticised the limited nature of the exemption as being “completely random” and useless to employers who still could not afford to pay workers R18 an hour.  There will be no further exemption from the NMW other than the 10% drop from R20 to R18.  A NMW of R18 leads to a monthly wage of R3,096 instead of R3,440, based on a 40-hour week.  The regulations create a series of tests companies can use to qualify for exemption from the NMW, based on profitability and solvency.  City Press calculations indicate that large parts of the manufacturing and construction industries will qualify for exemption.  Separate tests for households and nonprofit organisations will allow them to pay a lower NMW to domestic workers and nonprofit workers.  The normal NMW for domestic workers of R15 can be lowered to R13.50 if a household is exempted.  The system also allows for farm workers to be paid R16.20 an hour instead of the normal R18 in that sector.  Despite evidently covering a large part of the economy, the NMW exemption rules are nowhere near what organised business wanted.  Business Unity SA’s Kaizer Moyane said the exemption was “arbitrary” and failed to take into account real affordability.  Meantime, Cosatu will monitor the scale of exemptions this year and take the issue up again when the new NMW commission deliberates on the first year of the wage floor.

  • Read more of this City Press report by Dewald van Rensburg at SA Labour News

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