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The National Minimum Wage (NMW) Commission is inviting written representations from interested persons on the annual review and adjustment of the national minimum wage for year 2021.

The National Minimum Wage Act of 2018 requires that the NMW Commission review the NMW annually and make recommendations to Employment and Labour Minister on any adjustment of the national minimum wage, while also reflecting on alternative views, including those of the public.

In the latest review the majority of Commissioners recommend that the national minimum wage should be increased by 1,5% over and above inflation as measured by the consumer price index (CPI). The inflation rate measured by consumer price index (CPI) as of September 2020 was 3 percent, so the adjustment should be on the order of 4,5 percent, proposes the Commission. The Commission feels that the adjustment of the national minimum wage by 1,5 percent above inflation was not out of line with collective bargaining outcomes in 1999/20.

The majority of Commissioners also recommend that the minimum for farmworkers be aligned with the national minimum wage in 2021, and that the minimum for domestic workers be gradually increased to equal the national minimum wage by 2022.

The National Minimum Wage Act constitutes a decision to prioritise a more equitable pay structure that ensures working people do not live in poverty.

The Act also provides for exemptions for employers who truly cannot afford the adjustment.

In promoting the aims of the Act the Commission was considering setting three-year targets for the national minimum wage, however this objective has not been considered yet.

In considering the annual adjustment, the Commission consider the following factors: inflation, the cost of living, and the need to retain the value of the minimum wage; gross domestic product; wage levels and collective bargaining outcomes; productivity; ability of employers to carry on their businesses successfully; the operation of small, medium or micro-enterprises and new enterprises; likely impact of the recommendation adjustment on employment or the creation of employment.

The Commissioners feels that the COVID-19 downturn was a unique circumstance, and the implication for the national minimum wage remain difficult to anticipate. A modest real increase seems unlikely to aggravate the downturn, and could assist by working in tandem with other measures to stimulate the economy.

The National Minimum Wage Act was proclaimed by Republic of South Africa's President Cyril Ramaphosa in 2018 setting a historic precedent in the protection of low-earning (vulnerable) workers in South Africa and provided a platform for reducing inequality and huge disparities in income in the national labour market. At its introduction the NMW was expected to benefit 6.6 million workers.

The NMW was first implemented on 01 January 2019 at a level of R20 per hour. On 01 March 2020 the NMW base rate was adjusted to R20,76 per hour. The NMW is a floor level below which no employee should be paid. It is an unfair labour practice for an employer to unilaterally alter hours of work or other conditions of employment in implementing the NMW. The NMW is the amount payable for the ordinary hours of work and does not include payment of allowances (such as transport, tools, food or accommodation) payments in kind (board or lodging), tips, bonuses and gifts.

Written representations on the adjustments of the NMW should be send to: the Directorate National Minim Wage Policy and Basic Conditions of Employment Act (BCEA) Administration, Department of Employment and Labour, Private Bag X117, Pretoria, 001 or be sent by email to Unathi.Ramabulana@labour.gov.za within 30 days of the publication of the notice (30 November 2020).

For more information, contact:

Musa Zondi  

Acting Departmental spokesperson

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-ENDS-

Issued by: Department of Employment and Labour​