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10 Important Things You Should Know About R20 Wage Deal


Cyril Ramaphosa

On Wednesday, February 8, South Africa took one giant step towards having its first national minimum wage when Deputy President Cyril Ramaphosa announced that parties (par Cosatu) had signed the agreement.

These are the 10 most important parts of the agreement that every South African should know, as it doesn’t only impact the 6.6 million workers earning below R3 500 a month.

It has specific implications for start-ups, business owners, farmers as well as households who employ domestic workers:

1. Modalities for the introduction of a national minimum wage of R20 an hour to be implemented and enforced from no later than 1 May 2018.

2. This translates to about R3 500 per month for those working 40 hours per week and about R3 900 per month for those who work 45 hours per week.

3. A National Minimum Wage Commission will be set up to recommend annual adjustments to the level of the wage. They will analyse any positive or negative outcomes of the wage on the economy and the impact it has on the level of poverty, inequality and unemployment.

4. Businesses that are unable to afford the national minimum wage may apply for an exemption for up to 12 months. This process needs to be as simple and efficient and possible.Incentives will also be offered to fragile sectors. Government will explore ways in which exemptions could provide access to tax incentives.

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5. No employer may unilaterally alter downwards conditions of employment and hours of work, including those currently contained in private contracts, sectorial determinations or collective agreements because of the introduction of the national minimum wage. To do so will constitute non-compliance and unfair labour practice.

6. The national minimum wage will need legislative approval and this process will start immediately.

7. No businesses will be excluded from the national minimum wage. Small businesses and start-ups will need to be assisted to understand the implementation of the national minimum wage.

8. The Expanded Public Works Programme and Community Works Programme will be excluded from the national minimum wage, while the Nedlac committee of principals examine and review its participation. Inclusion would result in 350 00 participants being cut from the programme.

9. Domestic workers will be paid 75% of the national minimum wage and agriculture workers will be paid 90%, but both sectors will be brought up to 100% within two years of implementation, pending research by the commission on this timeframe.

10. Once the law comes into effect, the inspection, enforcement and compliance become effective immediately. Education is an integral part of enforcement. Labour inspectors will be full trained and capacitated on the national minimum wage.

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