ARTICLE
20 March 2024

New Earnings Threshold And Its Impact On South African Employers

E
ENS

Contributor

ENS is an independent law firm with over 200 years of experience. The firm has over 600 practitioners in 14 offices on the continent, in Ghana, Mauritius, Namibia, Rwanda, South Africa, Tanzania and Uganda.
The annual earnings threshold determined by the Minister of Employment and Labour will increase from R241 110.59 to R254 371.67, with effect from 1 April 2024, marking an increase of R13 261.08 per annum.
South Africa Employment and HR
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The annual earnings threshold determined by the Minister of Employment and Labour will increase from R241 110.59 to R254 371.67, with effect from 1 April 2024, marking an increase of R13 261.08 per annum.

The increase of the earnings threshold means that certain employees, who at present earn more than the current earnings threshold, and therefore do not enjoy certain rights provided for in the Basic Conditions of Employment Act, 1997 (“BCEA”), such as hours of work, overtime and payment of Sunday work, may now fall within this threshold and be entitled to these rights.

‘Earnings' for the purposes of the earnings threshold, refers to regular remuneration before deductions of income tax, pension, medical aid contributions and similar payments, but excludes similar payments (contributions) made by the employer in respect of the employee. Subsistence and transport allowances, achievement awards and payments for overtime worked received by employees are however not regarded as part of their remuneration.

The new earnings threshold also has an impact on temporary employment service (“TES”) employees. Section 198A(3)(b) provides that TES employees earning below the earnings threshold who are assigned to work for a client of a TES may be deemed to be permanent employees of that client in certain circumstances.

Unfair discrimination disputes have to be referred to the CCMA for conciliation initially. If they remain unresolved, employees earning below the earnings threshold may refer such disputes to the CCMA for arbitration if the alleged unfair discrimination related to grounds of sexual harassment, or the parties agree to arbitration. Those earning above the earnings threshold, on the other hand, are required to refer such disputes to the Labour Court for adjudication. Therefore with the new earnings threshold in place, a new group of employees will fall within the former category.

Employers would be well advised to audit their workforces, suppliers of labour, work practices, policies and contracts to ensure compliance with legislation, with due regard to the new earnings threshold.

Reviewed by Peter le Roux, an Executive Consultant, and Joe Mothibi, an Executive in ENS' employment department.

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.

ARTICLE
20 March 2024

New Earnings Threshold And Its Impact On South African Employers

South Africa Employment and HR

Contributor

ENS is an independent law firm with over 200 years of experience. The firm has over 600 practitioners in 14 offices on the continent, in Ghana, Mauritius, Namibia, Rwanda, South Africa, Tanzania and Uganda.
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