May 2020
LABOUR BRIEF NO. 427

Employers and Employees need to understand the National Minimum Wage Act. (NMWA).

The first anniversary for enactment of the NMWA has long gone and by now the initiation by DEL of the inspectorate program is well underway.

The legislation provides for the creation of the National Minimum Wage Commission which is charged with the responsibility of adjusting and reviewing NMW on an annual basis as well as reviewing any exemption awarded or non-payment of the NMW.

The objective of this legislation is found in the need to promote effective compensation practices which are fair and are aimed at eradicating inequality and so poverty. There is a need to promote fair and effective labour practice, and therefore in this regard the Acts seeks to widen the definition of the term “employer” to mean any person who is obliged to pay a worker for the work that the worker performed for that person. Additionally, the definition of the “worker” is a more expansive term than the term ‘’employee’’.

In this regard the “worker” means any person who works for another or is entitled to receive any payment for that work whether in money or in kind.  Therefore, although a person may not be classified as an ‘’employee’’, that person will still be classified as a ‘’worker’ and therefore will be entitled to payment in terms of the NMWA. (Note that this legislation has no reference to the National Intelligence Agency or the Defence Force, or any volunteer who performs work for another person and is not entitled to remuneration for their services).

It must not be forgotten that every worker is entitled to a wage payment in the amount of not less than that prescribed in the relevant schedule pertaining to the NMWA (i.e. schedule 1). Regarding Schedule 2, this deals with allowances paid for learnerships whereby the employer may pay a learnership allowance as an alternative to a wage.

The NMW rate cannot be waived for any reason and takes precedence over any other agreement which stipulates a payment less than that prescribed in terms of the NMW, and therefore also to note that employers cannot decrease any wage which is higher than the NMW.

An employer and/or employer organisation may apply for an exemption from the NMW which may be granted by the Minister for a fixed period during which a specified wage is granted for payment by the employer. All exemptions are granted by the Minister in terms of the NMWA regulations which allow for a maximum of a 10% reduction on the NMW rate. These regulations stipulate that the exemption notice granted by the Minister must be publicly displayed, and acknowledgement that any Trade Union interest in this regard has been met by consultation concerning the affected workforce. No exemption may be granted for less than 90% of the NMW.

In terms of the MNWA, the CCMA and related dispute mechanisms have jurisdiction to determine any dispute linked to the NMW.

K. Cowley
(Chairperson – (CEA – TESD)