From 1 July 2011, employees earning more than the new threshold of R172 000,00 per year will not automatically benefit from certain sections of the Basic Conditions of Employment Act, 1998. The previous threshold was R149 736,00 per year. Employees earning more than the monetary threshold cannot insist on only working a minimum of 45 hours in any week without receiving overtime pay (sections 9 and 10) and are also excluded from sections 11 and 12 which regulate compressed working weeks and the averaging of work hours. They cannot insist on a one hour meal interval (section 14), daily and weekly rest periods between ending and recommencing work (section 15) and to be paid for work done on Sundays (section 16). They also do not qualify for the protection afforded by the BCEA in relation to night work (section 17(2)) and are not automatically entitled to additional pay for working on public holidays (section 18(3)).
The potential pool of employees who are automatically entitled to overtime pay and for additional remuneration for work performed on weekends and public holidays will therefore increase from 1 July 2011.
Employers need to be aware of this change to ensure that their employees are paid what they are entitled to and to ensure that all the collective agreements, letters of appointment and policies which may be in place are updated to reflect the increase in the threshold.
In calculating an employee's annual earnings for purposes of the monetary threshold, "earnings" means the regular annual remuneration before any deductions such as income tax and pension and medical payments. Earnings exclude contributions which the employer makes in respect of the employee (for instance contributions towards medical aid and pension funds). In particular, subsistence and transport allowances, achievement awards and payments for overtime worked are not regarded as remuneration for the purpose of calculating an employee's earnings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.