ARTICLE
14 March 2024

Employment Law Earnings Threshold Increase From April 1, 2024

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Norton Rose Fulbright

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On 5 March 2024 the Minister of Employment and Labour announced an increase in the annual earnings threshold from R241 110,59 to R254 371,67. The increase is in effect from 1 April 2024.
South Africa Employment and HR

On 5 March 2024 the Minister of Employment and Labour announced an increase in the annual earnings threshold from R241 110,59 to R254 371,67. The increase is in effect from 1 April 2024.

For purposes of determining whether an employee earns in excess of the threshold, 'earnings' means an employee's regular annual remuneration before deductions including, income tax, pension, medical and similar payments, but excluding similar employer contributions, subsistence and transport allowances paid to an employee, achievement awards and overtime payments.

The earnings threshold is significant as it determines the application or otherwise of key provisions of employment legislation including the following:

  1. Employees who earn in excess of the earnings threshold are excluded from certain entitlements and protections under the Basic Conditions of Employment Act, 1997 including overtime pay, ordinary hours of work, compressed working week, averaging of hours of work, meal intervals, daily and weekly rest periods, Sunday pay, night work pay, and pay for working on a public holiday which is not an ordinary working day for an employee.
  2. Employees who earn in excess of the earnings threshold must refer disputes relating to alleged unfair discrimination under the Employment Equity Act, 1998 (excluding if the employee alleges unfair discrimination on the grounds of sexual harassment) to the Labour Court for adjudication and are not permitted to refer these disputes to the CCMA for arbitration without their employer's consent.
  3. Employees who earn in excess of the earnings threshold are excluded from the application of section 198A of the Labour Relations Act, 1995 in terms of which an employee is deemed to be the employee of the client of a temporary employment service if the employee is not performing a temporary service, section 198B relating to fixed term contracts and the limitations on the use of fixed term contracts, and section 198C relating to part-time employment.

Given that it determines the application of several employment rights and protections, it is important for employers to be aware of the increase in the earnings threshold.

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