Job losses that may result from the implementation of the national minimum wage can be avoided if businesses apply for an exemption, said President Cyril Ramaphosa.
In a written response to a question by DA leader Mmusi Maimane in Parliament, Ramaphosa clarified steps government is taking to mitigate an estimated 715 000 job losses resulting from the bill’s implementation.
The bill was passed by the National Assembly in May, following months of engagement with various stakeholders.
“The mitigation of job losses that may result from the introduction of the national minimum wage is the collective responsibility of government, business and labour,” said Ramaphosa.
He emphasised that the introduction of the national minimum wage was essential to address the challenge of low wages and wage inequality, as agreed to by all social partners and the National Economic Development and Labour Council.
“In an instance where a business is put under pressure due to the introduction of the national minimum wage, it is able to apply for an exemption for a period of 12 months,” said Ramaphosa.
“The exemption process is the most important mitigating factor in relation to the implementation of the national minimum wage as it is designed to avoid job losses.”
He added that the impact of the national minimum wage on jobs will only be known after a number of years following its implementation. Ramaphosa said that there are different estimates of job losses, but research also showed that there are “productivity gains” linked to higher earnings and increased household expenditure.
A National Minimum Wage Commission is to be established, the legislation is before Parliament. The commission will monitor the impact of the national minimum wage on the economy and on jobs, as well as consider future adjustments to the policy.