Private and company employers who argue they cannot afford to pay the new minimum wage may apply for a 10% reduction, under strict terms and conditions.
The government gazetted a 9.6% increase in the minimum hourly wage to R25.42, effective from March.
Employment and labour department director of employment standards Unathi Ramabulana said employers who want to be exempted must first consult with every representative trade union and if there is no union, the affected employees. Once this is done, they can apply to the department.
“For an application to be considered, an employer who operates a business must provide full financial statements for three years (with current year predictions and the two previous years) and such other information that may be needed as prompted by the exemption system such as depreciation, finance costs, operating expenses, tax, dividends etc, to determine whether the employer can afford to pay the national minimum wage.
“In respect of households, they must provide details of the annual household income and expenditure and any other information that may be needed as prompted by the system such as education, food and beverages, entertainment, loan repayments, travel costs etc, to determine whether the employer can afford to pay the national minimum wage,” Ramabulana said.
She warned employers, however, the law only allows a maximum exemption of 10% and that an exemption can be withdrawn where “an employer provided false or incorrect information for the exemption, the employer does not comply with the exemption notice or where an employer’s finances have improved so that it can afford the national minimum wage”.
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Strict process for employers who say they cannot pay national minimum wage
Private and company employers who argue they cannot afford to pay the new minimum wage may apply for a 10% reduction, under strict terms and conditions.
The government gazetted a 9.6% increase in the minimum hourly wage to R25.42, effective from March.
Employment and labour department director of employment standards Unathi Ramabulana said employers who want to be exempted must first consult with every representative trade union and if there is no union, the affected employees. Once this is done, they can apply to the department.
“For an application to be considered, an employer who operates a business must provide full financial statements for three years (with current year predictions and the two previous years) and such other information that may be needed as prompted by the exemption system such as depreciation, finance costs, operating expenses, tax, dividends etc, to determine whether the employer can afford to pay the national minimum wage.
“In respect of households, they must provide details of the annual household income and expenditure and any other information that may be needed as prompted by the system such as education, food and beverages, entertainment, loan repayments, travel costs etc, to determine whether the employer can afford to pay the national minimum wage,” Ramabulana said.
She warned employers, however, the law only allows a maximum exemption of 10% and that an exemption can be withdrawn where “an employer provided false or incorrect information for the exemption, the employer does not comply with the exemption notice or where an employer’s finances have improved so that it can afford the national minimum wage”.
TimesLIVE
Support independent journalism by subscribing to the Sunday Times. Just R20 for the first month.
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