Get to grips with the new minimum wage in South Africa, and find out how collective wage agreements in certain sectors could affect what you’ll earn as an expat.
In January 2019, the National Minimum Wage Act finally introduced a minimum wage in South Africa.
While many industries such as farming, hospitality, and domestic work already set minimum wages through collective agreements, this marks the first time a universal minimum wage has been in force in South Africa.
The new rules are the result of a long period of debate on minimum wages in South Africa, where unemployment rates are as high as 27%.
The ruling didn’t come without opposition, however. Some opponents claimed a minimum wage would increase unemployment levels, while others argued that the salary proposed didn’t go far enough to provide a better income for workers.
The national minimum wage in South Africa
Since January 2019, workers in South Africa have been entitled to a minimum wage of R20 per hour. This translates to around R3,500 based on a 40-hour working week.
The new rules apply to all workers in South Africa with some exceptions. These include the National Defence Force, the National Intelligence Agency, and Secret Service employees.
Three other groups have different minimum wage standards. Farm workers now earn a minimum wage of R18, domestic employees to R15, and workers on expanded public works programs to R11.
Employers in South Africa can apply for exemptions from the minimum wage for up to a year. At this stage, however, it is unclear as to the circumstances of when an exemption may be granted. If a company fails to pay the minimum wage, they face significant fines.
The wage are reviewed each year to assess whether it’s having the desired effect on alleviating poverty and reducing wage inequality.
Collective wage agreements in South Africa
Some employment sectors currently set their own minimum wages, although how it works can be quite complicated.
These sectoral minimum wages help vulnerable, low-paid workers. They are generally set either through collective bargaining in private sector councils or by direct regulation from the government following the Labor Relations Act and Basic Conditions of Employment Act.
Recent figures from private economic research organization Economists.co.za show that nearly 84.5% of South African workers earn a regular wage or salary.
The minimum wages vary widely within the private sector, where private sector councils set the standards. Those employed in lower-paid industries such as cosmetology and hairdressing earn between R1,809–R4,749. Conversely, those employed in the metal and engineering sector earn between R3,992–R12,687 per month.
The government also sets its own sectoral wage rates for specific industries. The rates, however, are slightly lower than those mandated by the private sector councils. When setting minimum wages in individual sectors, the Minister of Labour seeks advice from the Employment Conditions Commission. This ensures that the Basic Conditions of Employment Act are met. It also ensures that businesses will be able to afford to operate if they have to pay a minimum wage.
Some of the sectors that have set sectoral wages include the following: domestic work/contract cleaning, private security, forestry, wholesale and retail, hospitality, agriculture, taxi, learnership (a special form of apprenticeship), hospitality, metal and engineering, pharmaceuticals, and petroleum industries.
Minimum wage in South Africa by sector
For industries that operate a minimum wage, the level employers pay varies significantly. This depends on the role and the geographic location.
Some industries split South Africa into two or three pay zones when setting their minimum wage. However, others use as many as seven or eight areas, which can cause confusion.
Different rules may apply in some sectors, depending on whether staff work more than 27 hours per week.
You can find the most up-to-date minimum wage information for specific sectors and areas of South Africa on the MyWage website.
Minimum wage in South Africa: foreign employees
Sector-specific minimum wages for South African also apply to foreign workers. The new national minimum wage applies to both South African nationals and foreign employees.
Labor laws, however, will remain the same. If a South African company wants to employ a foreign national, they’ll need to secure a work permit.
Read Expatica’s guide for more information on how to get a South African work visa.
Labor law in South Africa: wage payments
The Basic Conditions of Employment Act regulates pay in South Africa. This act allows employers to calculate and pay wages using an hourly, daily, weekly or monthly system.
While employers can choose their preferred pay period, they must pay staff within seven days of this period ending.
Domestic workers paid on a daily basis should receive their money either during working hours or within 15 minutes of their shift ending.
South African rules allow employers to pay their staff either by cash or cheque; however, employers must provide pay slips. These must include their name and address, details of the pay per period, any deductions, and the rate of pay for overtime (if applicable).
You can find further information about worker rights in South Africa on the Department for Labor website.