The National Minimum Wage (NMW) Commission has issued a last call for comments and inputs from the public, businesses and other stakeholders overuy the potential changes to the rate for 2024.

Comments and inputs over the wage closes on Friday, 8 September 2023.

The commission said the written comments/representations concerning possible adjustments to the national minimum wage will be considered by the commission before it publishes its annual report and recommendations on the annual review of the national minimum wage later in the year.

The current rate of NMW jumped from R23.19 to R25.42 for each ordinary hour worked, effective 1 March 2023.

The existing national minimum wage determination now includes the vulnerable sectors of farm workers and domestic workers – which are now 100% aligned with the going rate.

The commission noted that the act applies to all workers and their employers except members of the South African National Defence Force, the National Intelligence Agency and the South African Secret Service.

The act does not apply to a volunteer, who is a person who performs work for another person and who does not receive or is not entitled to receive any remuneration for their service.

A fine may be imposed on an employer who pays an employee less than the national minimum wage.

Representations should reach the directorate: Employment Standards, Department of Employment and Labour, Private Bag X117, Pretoria, 0001 or be sent to nmwreview@labour.gov.za

Changes coming

While the NMW commission speaks of “possible” changes to the minimum wage, the group has already committed to hikes each year above inflation at the bare minimum.

In May, the commission gazetted its medium-term NMW targets, which set a three-year goal for the minimum wage and its commitments to meeting it.

Minimum wage increases have historically been done in consultation with various stakeholders and included considerations for the wider economy and the cost of living.

While these factors will still be at play, the commission has now explicitly linked the minimum wage to economic indicators.

Specifically, future minimum wage increases will be linked to the consumer price index (CPI) as well as the median wage level in the country.

The minimum wage should increase at rates above inflation, so that wages grow in real terms and don’t lose value, the commission said.

Even though the medium-term target is now explicitly tied to CPI, the commission has already hiked the minimum wage above inflation.

The latest increase, announced in February, saw the national minimum wage hiked by 9.6% – even though annual inflation for 2023 was expected at around 6% at the time (expectations have lowered since).

While unions and labourers welcomed the increase, employers and labour organisations were less enthused. Specifically, the latter raised alarms over the increase being far above inflation, pointing out that the wage was hiked around four percentage points higher than expected inflation for the year.

This makes the cost of labour higher in a business environment already under pressure due to the prevailing economic conditions.

 

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