Today's Labour News

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earningsClaire Bisseker writes that the new national minimum wage (NMW) of R20 an hour came into effect on 1 January and, though it’s too early to tell how well the exemption process is working, there are already allegations from business of bad faith.  

Because of the risk to employment, the flexibility afforded by an efficient exemption process is critical.  All along, business’s understanding of the NMW Act was that firms that could not afford to pay R20 an hour would be fully exempt subject to an independent, objective analysis of their finances.  However, in the middle of 2018 the government inserted a clause into the draft regulations limiting the extent of the exemption to 10% of the minimum wage.  So, exempt firms would still have to pay workers R18 an hour, a saving of just R2 an hour.  In December 2018, Business Unity SA (Busa) met labour minister Mildred Oliphant and urged her to reconsider this clause, following assurances from senior departmental officials that it was an oversight and would be removed.  Oliphant promised to reconsider, but Busa was shocked to find the clause had been retained in the final regulations gazetted two weeks later.  The fear is that the 10% discount will dissuade marginal firms from bothering to apply for an exemption and result in widespread noncompliance, destroying the credibility and effectiveness of the NMW system.

  • Read this article in full at BusinessLive (paywall access only)

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