Staff Writer
·29 Jun 2023
Businesses and households in South Africa don’t have to pay the minimum wage if they successfully apply for an exemption from the Department of Employment and Labour.
Speaking at a business seminar in the Eastern Cape on Wednesday (28 June), Unathi Ramabulana, the director of employment standards at the department, said that employers who want to be exempt from paying the National Minimum Wage must:
- First, consult every representative trade union, and if there is no such union, the affected employees
- Thereafter they can apply at https://nmw.labour.gov.za or at any departmental office.
The National Minimum Wage was recently increased by 9.6% to R25.42 per hour and was enacted on 1 March this year.
The wage does not include the payment of allowances such as transport, tools, food or accommodation, payments in kind -board or lodging, tips, bonuses or gifts; unless it is otherwise specified in government regulations.
For an application to be considered, an employer who operates a business must provide:
- Full financial statements for the three years (current year predictions and the two previous years); and
- Other information that may be needed as prompted by the exemption system, such as depreciation, finance costs, operating expenses, tax, dividends etc.
This will be used to determine whether or not an employer can afford to pay the minimum wage or not.
Ramabulana said the exemption is a lifeline for those businesses that cannot afford the wage.
For household employers who want to be exempt from paying their domestic workers the minimum wage they must provide:
- Details of the annual household income and expenditure; and
- Other information that may be needed as prompted by the system, such as education, food and beverages, entertainment, loan repayments, travel costs etc.
Ramabulana warned, however, that, under South African labour law, the exemption may not be more than 10% (lower than the minimum wage) and that an exemption can be withdrawn.
She said that an exemption could be withdrawn if:
- The employer provided false or incorrect information for the exemption;
- The employer does not comply with the exemption notice; or
- Where an employer’s finances have improved so that they can afford the minimum wage.
At the same seminar, the Department of Employment and Labour also warned businesses not to try and dodge the minimum wage, threatening large penalties and extensive proceedings at the Commission for Conciliation, Mediation and Arbitration (CCMA).
Praveen Naidoo, the director of the department, said that an employer that fails to comply with the national minimum wage would be fined by a labour inspector an amount equal to twice the value of the underpayment or twice the monthly wage on the first offence, then escalating to triple the amount for subsequent offences.
Read: Government signs major BEE settlement – this is what it says
Artmotion S.Africa
