A new earnings employee threshold has been issued. What does this mean for employees?

A new earnings employee threshold has been issued. What does this mean for employees?

“Earnings” means an Employee’s regular annual remuneration before the deduction of income tax, medical aid contributions and similar contributions. Briefly, an earnings threshold in South Africa refers to the gross annual earnings of any private person that form part of their employee benefits package. It is a benchmark used to see if an employee qualifies for some of the basic protections entrenched in the Basic Conditions of Employment Act as well as certain protections in other legislations such as the Employment Equity Act, and the Labour Relations Act.

What is the new earnings threshold?

The Minister of Employment and Labour has published the new earnings threshold and effective as from the 01^st of March 2021. The BCEA (Basic conditions of Employment Act) earnings threshold will increase to R 211 596.30 per annum (approximately R 17 633.00 per month). The previous earnings threshold was a gross income of R 205 433.30 a year and has not been increased for the past seven years. More employees will now be able to claim overtime, for working over the weekends and public holidays.

Changes to the national minimum wage

On the 01^st of March 2021, we have seen the introduction of the increased national minimum wage. The Minister of Employment and Labour has determined the new minimum wage to be R 21,69 for every ordinary hour worked. The amount is less for domestic workers for whom the minimum is set at R 19.09 an hour. This is an increase of approximately 4.9 %.

To ensure your rights as an Employee or Employer are protected, kindly contact Duvenage Attorneys and our labour law professionals will gladly assist you.