As of March 1, 2023, South Africa’s new earnings threshold comes into effect, which will have a significant impact on the country’s labor laws. Here’s what you need to know.
The new earnings threshold set by the Minister of Employment and Labor is R241,110.59 a year, or approximately R20,092 a month. Employees earning in excess of this threshold will lose certain automatic protections under the Basic Conditions of Employment Act (BCEA).
According to legal experts from Cliffe Dekker Hofmeyr (CDH), the BCEA provisions that regulate the following will no longer apply to employees earning in excess of the threshold:
Employers and employees should be aware of the impact of this change, as it could have a significant influence on salary expectations, particularly in cases where employees regularly work overtime, night shifts, or weekends.
Impact on Other Labor Laws
Aside from the BCEA provisions, the new earnings threshold will also affect other areas of labor law, including:
The sections covered in these acts are intended to protect vulnerable employees and regulate, amongst other things, hours of work, overtime, work over weekends, lunch breaks, and even where labor disputes need to be handled.
Employees earning under this threshold enjoy the full protection of the BCEA, and can, for example, demand overtime pay at a rate of 1.5 times, or legally refuse to work more than 45 hours a week.
For purposes of determining whether an employee earns in excess of the earnings threshold, “earnings” means an employee’s regular annual remuneration before the deduction of income tax, pension fund contributions, and medical aid contributions, and similar payments, excluding similar contributions made by the employer in respect of the employee. Subsistence and transport allowances received, achievement awards, and payments for overtime worked do not fall within the scope of remuneration.