On 1 February 2019, the National Minimum Wage Act No 9 of 2018 (“the Act”) came into effect.
In terms of the Act, the national minimum wage is now set at a minimum of R20.00 per hour for all South African citizens. This works out to roughly R3,500.00 per month, depending on the number of hours worked.
However, the operation of the Act remains limited for the time being insofar as the farming sector as well as employers of domestic workers are exempted, for a two-year period, from the minimum wage rate of R20.00 prescribed by the Act.
These employers are entitled to pay less than the prescribed minimum wage, being 90% of the national minimum wage per hour in respect of the farming industry and 75% of the national minimum wage per hour in respect of domestic workers.
However, on 1 February 2021, the minimum wage prescribed by the Act will apply to all employers in South Africa (including farmers and domestic workers).
Whilst there has been major uproar relating to the introduction of the minimum wage, with many labour unions claiming that the rate is insufficient for poorer households, this new law is expected to benefit six million workers who currently earn below R3,500.00 per month.