On 7 March 2025, the Minister of Employment and Labour published her determination of a new earnings threshold under the Basic Conditions of Employment Act, 1997 (‘BCEA’).
As of 1 April 2025, the earnings threshold prescribed by section 6(3) of the BCEA will increase from R 254 371,67 per annum (equivalent to R21 197.64 per month) to R261 748,45 per annum (equivalent to R 21 812.37 per month).
For this purpose, the term ‘earnings’ refers to regular remuneration before deductions, and excludes employer contributions made in respect of the employee, subsistence and transport allowances, achievement awards, and payments for overtime.
The increase in the earnings threshold means that employees earning less than R 21 812.37 per month (previously R21 197.64) will now fall within the scope of the special requirements provided for by legislation.
Some of the provisions of the BCEA which affect those earning below the earnings threshold are:
- ordinary hours of work;
- overtime;
- compressed working week;
- averaging of hours of work;
- meal intervals;
- daily and weekly rest periods; and
- compensation for work performed on Sundays, at night or on public holidays.
An employee earning below the threshold amount may refer a dispute to the Commission for Conciliation Mediation and Arbitration (‘CCMA’) for arbitration instead of the Labour Court, where an employer has failed to pay any amount owing to that employee in terms of the BCEA, the National Minimum Wage Act, 2018, an employment contract, a sectoral determination or a collective agreement. An employee earning below the threshold amount may also refer certain disputes under the Employment Equity Act, 1998 to the CCMA instead of the Labour Court.
The threshold is also relevant under the Labour Relations Act, 1995 in connection with labour broker employees (temporary employment services), fixed term contracts, and part-time employees.
Employers must ensure compliance with the new earnings threshold by reviewing its employee earnings, as there may be an increase in the number of employees falling below the threshold. The terms and conditions of employment of any additional employees which now fall below the earnings threshold must meet the minimum standards of the BCEA on issues such as working hours and overtime payments. Alternatively, employers may increase the earnings of some employees to place them above the threshold but must then prepare for the possible increase in remuneration costs.
This bulletin is authored by partner Owethu Mbambo and candidate attorney Tamrin Slager.
