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On 1 June 2012, the Minister of Labour announced that, with
effect from 1 July 2012, the earnings threshold in the Basic
Conditions of Employment Act, which operates to exclude employees
earning above the threshold from certain BCEA entitlements and
protections, will increase from the current R172,000 per annum to
R183,008 per annum, an increase of 6.4%.
Employees earning above this threshold are excluded from working
time protections such as maximum ordinary working hours, meal
intervals, limits on how much overtime they are permitted to work,
enhanced rates of pay for overtime work and work on Sundays,
minimum rest intervals, shift allowances and access to transport
for night work, etc.
The increase in the threshold will therefore operate to extend
these BCEA working time protections to those employees who are
currently earning between R172,000 and R183,008. Employers
employing workers who earn in this range may therefore need to
review their working time arrangements with these employees and
payrolls to make sure they are still compliant.
What constitutes "earnings" for purposes of the
threshold remains unchanged. It is 'the regular annual
remuneration before deductions, i.e. income tax, pension, medical
and similar payments but excluding similar payments (contributions)
made by the employer in respect of the employee: Provided that
subsistence and transport allowances received, achievement awards
and payments for overtime worked shall not be regarded as
remuneration'.
Employers should also generally take care to avoid
unintentionally granting their employees contractual rights (over
and above the statutory rights) to these BCEA working time
protections - otherwise employees whose earnings increase beyond
the threshold, which would ordinarily result in them no longer
being entitled to the statutory working time protections, may end
up still being entitled to the protections because their contracts
(entered into at a time when they earned less than the threshold)
inadvertently give them contractual rights thereto.
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.
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