Minimum wage

Image: Pixabay/stevepb

Minimum wage: Fines for violating the act and associated labour laws

Employers who fail to pay the minimum wage will be liable to pay a fine.

Minimum wage

Image: Pixabay/stevepb

Both the National Minimum Wage Act and the Labour Relations Amendment Act will come into effect on 1 January 2019.

These acts will regulate payment parameters and collective bargaining models. The controversial National Minimum Wage Act (NMWA) was recently approved by President Cyril Ramaphosa and has been met with mixed reactions from the public and trade unions alike.

The Labour Relations Amendment Act, which, along with the NMWA, was officially gazetted on Wednesday 12 December makes changes to the Labour Relations Act, impacting bargaining council agreements and procedures relating to pickets, strikes and lock-outs.

The National Minimum Wage Act and Commission

As reported by Business Tech, the introduction of a national minimum wage considers regulations stipulated in the Basic Conditions of Employment Amendment Act. The National Minimum Wage Act endorses requires that employees be entitled to R20 for each ordinary hour worked.

Exceptions are made for farm labourers, who will be entitled to R18 per hour, and domestic workers, who will be will be entitled to R15 per hour.

Legal firm Cliffe Dekker Hofmeyr has noted that the official introduction of the NMWA includes the formation of the National Minimum Wage Commission which will be responsible for annual reviews of the act.

Annual adjustments tabled by the Commission will consider the following factors:

  • cost of living;
  • minimum living levels;
  • alleviation of poverty;
  • wage differentials and inequality;
  • conditions of employment;
  • health, safety and welfare of workers;
  • employment levels;
  • inflation;
  • Gross Domestic Product growth

The Minister of Labour will reserve the right to approve or reject the adjustments tabled by the National Minimum Wage Commission.

Employers who are unable to pay the minimum wage may apply for an exemption, as afforded by the act. However, employers who fail to pay the minimum wage will be liable to pay a fine. According to Cliffe Dekker Hofmeyr, the fine is calculated per employee as the greater amount of twice the value of the underpayment or twice the employee’s monthly wage.

The Labour Relations Amendment Act

The Labour Relations Amendment Act (LRAA) changes bargaining regulations and includes provisions for the following:

  • extension of bargaining council agreements to non-parties by the Minister of Labour;
  • extension of funding agreements of bargaining councils;
  • picketing through collective agreement or through prescribed picketing rules;
  • extension of the meaning of ballot for a strike or lock-out to include a secret vote;
  • creation of an advisory arbitration panel.

The advisory arbitration panel will be tasked with resolving pickets, strikes and lock-outs that deadlock or turn violent. The panel is also afforded to right to intervene should protest action threaten local or national stability. The arbitration panel will also be mandated to investigate the cause and circumstances of protests.