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Increase in Minimum Wage

Updated: Mar 7, 2023

As of 1 March 2023, the implementation of the increased annual earnings threshold determined by the Minister of Employment and Labour will be in force and effect. The annual earnings threshold have increased to R20 092.55 per month or R241 110.59 per annum. The earnings threshold impacts on the application of the Basic Conditions of Employment Act, 1997 (BCEA), the Labour Relations Act, 1995 (LRA) and the Employment Equity Act, 1998 (EEA). Employees earning in excess of the earnings threshold are excluded from the provisions of the BCEA, which regulate ordinary hours of work, overtime, meal intervals, daily and weekly rest periods, compressed working weeks, Sunday pay, pay for night work and pay for work on public holidays.

With regards to the LRA, employees earning in excess of the earnings threshold are not subject to the deeming provision where a temporary employment service or labour broker who are not performing a temporary service are deemed to be employees of the client for purposes of the LRA. Employees earning in excess of the earnings threshold fall outside the scope of the provisions relating to fixed-term employees who are deemed to be employed indefinitely after three months.

“Earnings” is defined as an employee’s regular annual remuneration before the deduction of income tax, pension fund contributions, medical aid contributions and similar payments. It excludes similar contributions made by the employer in respect of the employee but is subject to the proviso that subsistence and transport allowances received, bonuses and payments for overtime worked do not fall within the scope of remuneration.

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