The earnings threshold is the ‘dividing line’ where certain provisions of the Labour Relations Act (LRA), Basic Conditions of Employment Act (BCEA) and the Employment Equity Act (EEA) apply.

On 8 February 2022, the minister announced that the new earnings threshold will be set at R224,080.48 per year ( R18,673.37 per month) as from 1 March 2022.  This amount is before deductions i.e. tax, pension, medical and similar and excludes the employers’ contributions such as transport allowance, achievements, overtime. 

The previous earnings threshold was set in 2021 at R211,596.30 per year (R17,633.25 per month). 

The threshold is seen as a means to protect vulnerable employees and is used to determine which factors relating to the LRA and other basic conditions of employment shall apply.

Employees earning under the threshold enjoy the full protection of the BCEA, they can enjoy the provisions of overtime pay at a rate of 1.5 times for example, or night shift allowances and transport for work done after 18:00. 

On the other hand, employees earning above the threshold are precluded from these provisions – meaning for example they are not automatically entitled to overtime, they are excluded from the protection of sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) of the Basic Conditions of Employment Act, 1997, “BCEA”.  

However, nothing prohibits the employer and employee to deal with these provisions that are excluded in terms of the BCEA, contractually.  For example, parties may conclude contractually on any compensation for hours worked in excess of the normal 45-hour work week, if such employee is excluded from the provisions of the “BCEA”. 

The Minister of Employment and Labour has also published increases in the National Minimum Wage Act, “NMWA”. These increases are also effective from 1 March 2022.

The national minimum wage will change from ZAR21.69 to ZAR23.19 for each ordinary hour that an employee works.

It is important to note that domestic workers will also now, with farm and other workers in the Republic, be entitled to the same national minimum wage of ZAR23.19. However, workers employed on an expanded public workers programme are entitled to ZAR12.75 per hour.

The NMWA has also determined and set the new minimum wage rates for the Contract Cleaning and Wholesale and Retail Sectors, therefore in these sectors the published minimum is payable to employees operating in these sectors. The department has also warned employers against the changing of working hours or other employment conditions to avoid paying the national minimum wage. Such practices in trying to circumvent the NMWA is deemed as illegal.  In instances where an employer cannot afford the prescribed minimums, an application to be exempted from these provisions may be applied for.