In this bulletin, we report on the new national minimum wage, discuss how this wage is to be calculated and comment on how it may affect employees who are not full-time employees, particularly domestic workers.
The new national minimum wage
On 4 February 2025, the Minister of Employment and Labour published the new national minimum wage. This is done under the National Minimum Wage Act, 2018.
Effective 1 March 2025, the national minimum wage for all workers will be increased to R28.79 for each ordinary hour worked, an increase on the present minimum of just less than 4,4%.
- For a person working a 38-hour week; this is equivalent toR1,094.02 per week or R4,737.11 per month.
- For a person working a 45-hour week, this is equivalent to R1,295.55 per week or R5,609.73 per month.
- For a person working for four hours or less in a day, this is equivalent to R115.16 per day.
The minimum wage is an hourly one and so determining the ordinary hours worked by the employee for an employer is important. This is so particularly in the case of weekly or monthly paid employees, part-time employees or employees working for more than one employer.
The determination adjusts the national minimum wage for workers earning at this level. It does not prescribe an increase for workers, nor affect those already earning above the new minimum wage.
There is no longer any difference between the minimum wages for general workers, farm workers or domestic workers.
The published determination also deals with learnership allowances, the Contract Cleaning Sector and the Wholesale and Retail Sector. The sectoral determinations for these sectors are different and are adjusted as well.
The calculation of the wage
Employers should note how a wage is to be calculated for the purpose of ensuring that no less than the minimum wage is paid. In summary, they must include only what is paid in money and must exclude in the calculation other amounts such as meal allowances, transport or accommodation provided.
Our law has long recognised the difference between “remuneration” and “wage”. The Basic Conditions of Employment Act, 1997, for example, defines both terms and applies the terms differently and deliberately in that Act. The courts have also held that while a wage may be part of “remuneration,” the converse is not always true. Remuneration may be paid in money or in kind, or both in money and in kind, whereas wage is the amount of money paid or payable.
The National Minimum Wage Act sets a minimum wage. In this Act, as in the Basic Conditions of Employment Act, wage is defined to mean the amount of money paid or payable to a worker in respect of ordinary hours of work, or, if they are shorter, the hours a worker ordinarily works in a day or week. Unlike the Basic Conditions of Employment Act, there is no mention of “remuneration.”
Every worker is entitled to payment of a wage in an amount no less than the national minimum. Every employer must pay wages to its workers that are no less than the national minimum.
What then does the Act say about what is to be counted and what excluded in determining whether the worker is receiving no less than the minimum?
Section 5 of the Act states that the calculation of a wage for the purposes of the Act is the amount payable in money for ordinary hours of work, excluding –
- any payment made to enable a worker to work, including transport, equipment, food, or accommodation allowance, unless specified otherwise in a sectoral determination;
- any payment in kind, including board or accommodation, unless specified otherwise in a sectoral determination;
- gratuities, including bonuses, tips, or gifts; and
- any other prescribed category of payment.
Thus, while accommodation, food, or transport allowances for an employee may be part of remuneration, and thus included for the purpose of calculating pay for annual leave, payment in lieu of notice and severance pay, they are not part of the wage for determining whether the worker is being paid at least the national minimum.
This is further subject to section 9A of the Basic Condition of Employment Act. This section provides that a worker who works for less than four hours on any day must be paid for four hours. This means that the national minimum wage will be effectively R115,16 per day and no worker should receive less than that.
Domestic workers
The remuneration of most if not all employees in the formal sector is likely to exceed even the new national minimum wage. The Act is aimed at the most vulnerable workers in our country and has perhaps its most profound impact on domestic workers and farm workers, who are often part-time employees and work for more than one employer.
The rest of this bulletin therefore deals with the position of domestic workers, the calculation of their wages and, in particular, issues regarding accommodation and food provided by the employer.
How do employers of domestic workers (including gardeners and others working in and around a private household) ensure that they are paying not less than the statutory minimum? What benefits commonly afforded in South Africa to domestic workers may be counted and which are to be excluded for this purpose?
The employment of domestic workers is regulated not only by the National Minimum Wage Act, but also by the Basic Conditions of Employment Act, and Sectoral Determination 7 for the Domestic Worker Sector, 2002.
First, as discussed, an employee must be paid no less than R115,16 per day, even if he or she is working only four hours or less in the day.
Next, concerning accommodation, under the sectoral determination, an employer may deduct from the wage paid to a domestic worker not more than 10% of the wage for a room or other accommodation supplied to the domestic worker by the employer, but only if –
- the accommodation provided is weatherproof, and generally kept in good condition;
- has at least one window and a door that can be locked, and
- has a toilet and bath or shower if the domestic worker does not have access to another bathroom.
In addition, there must be an agreement in writing as to what amount is to be deducted, and that it be deducted from the wage.
Food is different. The sectoral determination prohibits an employer from receiving any payment directly or indirectly, or withholding any payment from a domestic worker for:
- the employment or training of the domestic worker;
- the supply of work equipment or tools;
- the supply of any work clothing; or
- any food supplied to the domestic worker while the domestic worker is working or at the workplace
The further prescripts of the Basic Conditions of Employment Act and of the Sectoral Determination concerning, for example, written particulars of employment, hours of work, overtime, various forms of leave, and other deductions from remuneration or wage, are applicable but are beyond the scope of this bulletin.
This article was prepared by Counsel Nigel Carman and candidate attorney Nompumelelo Dlhamini
