“I’m a farm owner and was wondering what the new minimum wages announced by Government will mean for my farming business?”
The National Minimum Wage Act (NMWA) came into effect on the 1st January 2019 during which it prescribed a rate of R20 for each ordinary hour worked by specific employees covered by the NMWA. The National Minimum Wage (NMW) presents a rate or level below which an employee may not be paid. The NMWA requires the National Minimum Wage Commission to review the applicable rates annually and make recommendations to the Minister. Factors including inflation, the operation of small, medium or micro-enterprises and new enterprises and cost of living are all considered in determining the need to increase the NMW and the appropriate rates.
Accordingly, on 8 February 2021, the Minister of Employment and Labour published an amendment in the Government Gazette in terms of which the NMW was increased to R21.69 per hour for each ordinary hour worked effective from the 1st March 2021. This amendment included the increase of the minimum wage for farm workers whose wages were ordinarily lower than the NMW. In March 2020, the minimum wage for farmworkers and domestic workers was adjusted to R18.68 per hour for farm workers and R15.57 for domestic workers for each ordinary hour worked. Farm workers will however now earn the ordinary NMW currently set at R21.69 and domestic workers will earn a minimum wage of R19.09 per hour, aiming to increase the income of these vulnerable class of workers.
For employers, it does mean that their salary bill will increase. Important to note is that the NMW is only for the ordinary hours which has been worked by the employee and does not include the payment of benefits such as travelling, accommodation and/or commissions.
Employers are obligated to pay their employees not less than the rate prescribed by the NMWA unless the employer has been granted an exemption after having lodged an exemption application with a delegated authority and such application has been granted.
An employer may also not reduce the employees’ working hours or make less favourable any other condition of employment as a means to circumvent NMWA. An employer who acts contrary to this may be taken to the Department of Labour where, if found guilty of non-compliance, the employer can be issued with a fine.
It is important that you ensure that you comply with the amended NMWA applicable to your farm workers. If necessary, also consult with your labour specialist to help you get to grips with the implications of the amended provisions of the NMWA.