South Africa national minimum wage

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What you need to know about South Africa’s new minimum wage

South Africa’s new minimum wage has been gazetted and will take effect from 1 March 2020. Here’s what it means for the country’s workers.

South Africa national minimum wage

Image via Adobe Stock

The new National Minimum Wage (NMW), according to Minister of Employment and Labour Thulas Nxesi, is R20.76 — a small increase of just 3.8%. 

The new order is set to take effect from 1 March 2020. As with the original minimum wage introduced on 1 January 2019, the gazette also outlines what it means for workers in certain sectors.

The minimum wage for workers 

According to the gazette, these are the stipulated wages for workers in various sectors: 

  • Farmworkers are entitled to R18.68 per hour;
  • Domestic workers are entitled to R15.57 per hour; and
  • Workers employed on an expanded public works programme are entitled to R11.42 per hour.

South Africa officially introduced a national minimum wage in January 2019 to protect workers from low wages.

The increase has helped to make the lives of workers a little easier, however, it is not substantial enough to stamp out poverty or completely change their lives. 

The National Minimum Wage Act empowers the National Minimum Wage Commission to assess and review it each year. This hopefully means that a substantial improvement is ahead of us.

Top ten highest minimum wage countries released a report, comparing how the minimum wage rates have changed in various countries in 2020. These are the “best.”

  • Luxembourg
  • Australia
  • Ireland 
  • Netherlands
  • United Kingdom 
  • South Korea 
  • Canada 
  • Belgium 
  • Germany  
  • France  

Top ten lowest minimum wage countries 

  • Uzbekistan 
  • Nigeria 
  • India 
  • Kazakhstan 
  • Armenia 
  • Pakistan 
  • Philippines 
  • Moldova 
  • Azerbaijan 
  • Russia

Where does South Africa rank?

Countries that fell in the bracket of between $200 and $300 are: 

  • Serbia at $284 (R4 094.94)
  • Bulgaria at $268 (R3 864.53)
  • North Macedonia at $261 (R3 763.59)
  • Malaysia at $255 (R3 677.07)
  • Argentina at $253 (R3 648.23)
  • Peru at $245 (R3 533.08)
  • South Africa at $235 (R3 388.88)
  • Brazil at $230 (R3 316.77)
  • Thailand at $223 (R3 215.83)
  • Turkmenistan at $208 (R2 999.52) 

South Africa ranks outside of the top ten highest and lowest top ten lists and ranks seventh out of the countries between R3 000 and R4 000. 

Here’s how the BEE laws have changed

Besides an increase in the minimum wage bill, there will also be a few major changes to the way BEE regulations – as well as other “equity numerical targets” – are enforced this year because cabinet has officially approved the submission of the Employment Equity Amendment Bill of 2020 (EEA) to Parliament.

The Bill promotes equal opportunity and fair treatment in employment through the elimination of unfair discrimination. It also ensures that an employment equity certificate of compliance becomes a precondition for access to state contracts. 

This essentially means: 

  • Nxesi gains more control on what targets can be set for the employment of each demographic — whether that’s for BEE, or to bring more women and disabled citizens into the workforce;
  • Those seeking deals with the government — local, provincial or national — must possess a compliance certificate; and 
  • Small businesses will be put under less pressure to comply with strict regulations.