Minimum Wage Compliance in '25: What Every South African Employer Must Know

corpfin1
Mar 31
2 min read

South Africa’s National Minimum Wage has continued to evolve since the enactment of the National Minimum Wage Act 9 of 2018 (“the Act”), with the latest rate updates taking effect on

1 March 2025.

The minimum wage framework is designed to protect vulnerable workers and combat income inequality. Employers who fail to comply not only risk reputational harm but could face serious financial penalties and legal action.

What Is the 2025 Minimum Wage?

As of 1 March 2025, the prescribed minimum wage is:

R27.58 per hour for ordinary hours worked
Applies to all employees, including domestic workers, farmworkers, and expanded public works employees. Does not include allowances (e.g. transport, tools, accommodation), bonuses, tips, or commissions.

Does the Act Apply to All Employers?

Yes, with limited exceptions:

The Act excludes members of the National Defence Force, National Intelligence Agency, and Secret Service.
Sectoral Determinations may vary based on specific industries but must never fall below the national minimum wage

Common Compliance Mistakes to Avoid

Paying below R27.58/hour, even by agreement - is unlawful
Employers may not reduce an existing wage if it's higher than the prescribed minimum.
A lower wage stated in a contract must be adjusted upwards to the legal minimum

Failure to do so is not only unethical, it is an unfair labour practice under the Labour Relations Act.

Consequences of Non-Compliance

Non-compliant employers may face:

Fines of up to double the underpayment or double the employee’s monthly wage, whichever is higher.
Labour inspections and enforcement action by the Department of Employment and Labour.
CCMA disputes, leading to binding arbitration awards to recover arrears and force compliance