New BCEA earnings threshold

New BCEA earnings threshold

• 12 March 2025
• Regulatory Compliance and Legislation
• South African Accounting Academy

Summary:

The Basic Conditions of Employment Act (BCEA) annual earnings threshold has been increased to R261 748,45 per annum (before deductions) – with effect from 1 April 2025.

Article:

The increase in the threshold will mean that from 1 April 2025, some employees who earn more than R254 371,67 but less than R261 748,45 per year may be entitled to additional protections, such as overtime payment when working more than 45 hours per week, compulsory breaks and rest periods, night work allowances and the like.

The previous earnings threshold was a gross income of R254 371,67 a year. This is an increase of 2,9%.

The new earnings threshold equates to R21 812,37 per month.

“Earnings” means 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 for the purpose of this notice.

Employees who earn above the threshold are not entitled to certain of the protections afforded to those employees earning below the threshold.

• The new determination affects ordinary hours of work (section 9), overtime (section 10), compressed working weeks (section 11), averaging hours of work (section 12), meal intervals (section 14), daily and weekly rest periods (section 15), pay for work on Sundays (section 16), pay for night work (section 17(2)) and pay for public holidays where the employee works on a day he/she would not ordinarily work (section 18(3)).
• Employees earning above the threshold are not subject to the deeming provisions that apply to temporary employment services (labour brokers), and fixed-term employment provisions under the LRA.
• Employees earning above the threshold are not allowed to refer disputes relating to unfair discrimination under the EEA to the CCMA for arbitration unless it is related to sexual harassment or all parties agree to arbitration. Such disputes must proceed to the Labour Court for adjudication.

Click here to download the Government Gazette Notice:

https://www.gov.za/sites/default/files/gcis_document/202503/52232rg11806gon5970.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The BCEA is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (Non-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• As an employer, you also need to comply with the BCEA in your workplace.

Relevance to Your Clients:

• An entity (company or close corporation) has a duty to comply with the Basic Conditions of Employment Act, otherwise they could be held liable.
• An employer has a duty to comply with the BCEA.

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