The national minimum wage became effective on 1 January 2019, and that introduces compliance and penalty issues that accountants and their clients need to be aware of.
The National Minimum Wage Act (NMWA) applies to all workers and employers, though there are certain exemptions for the army, intelligence and volunteers who work for others without remuneration.
The national minimum wage rate is R20 per hour, falling to R18 an hour for farm workers, R15 an hour for domestic workers and gardeners, and R11 an hour for those employed on expanded public works programmes.
A National Minimum Wage Commission must be formed within 18 months of the commencement of the act and will be tasked with adjusting the NMW of farm workers and domestic workers within two years, and determining an adjustment of the applicable national minimum wage.
What the minimum wage excludes
- Transport, food and accommodation allowance, unless otherwise specified in a sectoral determination of wages
- Payment in kind
- Bonuses, tips and gifts
- Any other form of prescribed payment.
All employers will be required to pay workers the relevant minimum wage, and adjust their employment contracts to reflect the new pay rates.
Companies can apply for exemptions from the NMWA on the National Minimum Wage Exemption System if they cannot afford the new minimum wages, and can prove it. Exemptions can only be granted for a maximum of 12 months at 90% of the NMW and once the relevant trade unions or workers have been consulted.
There will be penalties, fines and possible arrest for non-compliance and this is something accountants need to know. You could also find yourself at the CCMA (Commission for Conciliation, Mediation and Arbitration) for not adhering to the new act.
This is an act that accountants need to know. SA Accounting Academy’s technical expert Lettie Janse van Vuuren CA(SA), RA, has researched and summarised the most salient information for your convenience and will present this to you at this upcoming webinar:
Here is what you will get at the webinar:
- How the act will affect you and your clients
- Exemptions from National Minimum Wage
- Reference to the Basic Conditions of Employment Act
- Changes to specific groups; Domestic workers and Expanded Public Works Programme workers
- The National Minimum Wage Commission
- The possibility of owing back-pay to employees
- Articles identifying concerns and discrepancies within the act
The webinar will be presented on 07 February 2019 from 9:00 to 11:00. Attendance will earn you 2 CPD hours.
The cost of the webinar is R399-00 for an individual or R699 for your whole firm.
Click here to book your attendance.