No longer can employees pay employees less than minimum wage in South Africa. Department of Labour Director: Employment Standards, Stephen Rathai, has announced that there will be penalties for employers who contravene national minimum wage (NMW). Rathai says that compelling non-compliant employers to pay the worker twice the amount that is owed for non-payment as one of the penalties.
Minimum wage in South Africa is currently set at R3500 a month for workers on a 40 hour week and R3 900 per month for a 45 hour week. This took effect from May 2017. This wage, while still very low, is the beginning of uplifting the 6.6 million workers in the country who earn below R3 500 a month, while also hopefully mitigating job losses. Across various industries in South Africa, such as agriculture and cleaning, over half a million workers earn less than R20 an hour. Rathai says that the NMW for domestic workers will be 75% of the NMW while NMW for farm workers will be 90% of the NMW.
Cyril Ramaphosa has stated that the wage will be adjusted every year and handled by a national minimum wage commission. This commission would also investigate the impact of the NMW on the economy, collective bargaining and income differential, amongst others. “The National Minimum Wage Commission will also make recommendations on adjusting the NMW based on inflation, cost of living, wage levels, productivity, and wage differentials,” said Rathai.
Some have critiqued the NMW, calling it a quick fix for a much larger issue. While the NMW will help those who already have jobs, it will do little to encourage job creation, something that is greatly needed in South Africa. According to Stats SA, the official unemployment rate is 27.7%.. Youth (15-34 years) unemployment rate was 38.6%. As such, the government needs to implement changes that target unemployment rates specifically in order to make a greater change in the South African population.
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