The National Minimum Wage Commission has recommended an inflation plus 1.5% increase for the national minimum wage from March 1 2025, reflecting the requirement to address living costs and ensure fair compensation for workers.
The national minimum wage has been in effect since 2019 when it was pegged at R20 an hour. It has been gradually increased to R27.58.
Financial services groups including Old Mutual and SA’s largest short-term insurer, Santam, have set their minimum wage at R15,000 per month in a move that could put pressure on other financial services companies to reconsider their minimum wages.
The commission, headed by Imraan Valodia, released its latest recommendations this week ahead of the January deadline for public comments on the potential increase, which would have to be approved by labour and employment minister Nomakhosazana Meth.
Among the considerations that went into the proposal for the increase in the minimum wage by the commission include inflation and the cost of living, the need to retain the value of the national minimum wage, the ability of employers to carry on their businesses successfully, SA's growth levels and the likely effect on employment or employment creation.
Wages for the covered workers grew approximately 19% in the second quarter of 2024, a period after the introduction of the new minimum wage
— National Minimum Wage Commission
“The national minimum wage sets a new wage floor below which no workers must be paid. The new floor should ideally raise the wages of those previously earning below the set level,” the commission said in its report.
“Wages for the covered workers grew approximately 19% in the second quarter of 2024, a period after the introduction of the new minimum wage.”
Business Day previously reported that Cosatu, which represents some of the country’s teachers, nurses, police and prison officials, was seeking above-inflation increases for the lowest-paid workers, saying it would make up for the low levels of increases from 2019 to 2021 and to cushion against inflation.
It was proposing the minimum wage be increased by the CPI (consumer price index) plus 3% in 2025.
If CPI is 5.9% for 2024 (as set out by the Reserve Bank), the wage should be increased by 8.9% from R27.58 to R30.03. It also suggested minimum wage adjustments be effected on January 1 each year.
The General Industries Workers Union of SA, an affiliate of the SA Federation of Trade Unions representing more than 20,000 members across the chemicals, food, mining, cleaning, wood, food processing, plastic, furniture, glass, hospitality and security industries, has proposed an increase to R15,000 per month.
“While the National Minimum Wage Act aims to advance economic development and social justice through the application of the national minimum wage, it considers the effect that annual minimum wage adjustments may have on employers’ ability to carry on their businesses successfully,” the union said.
“Because of this consideration, the act makes provision for a process that exempts deserving employers from paying the national minimum wage where successful applications are made.”
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