New increased Minimum Wage effective from 1 March 2024

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New increased Minimum Wage effective from 1 March 2024

• 07 February 2024
• Legal and Compliance
• South African Accounting Academy

The new NMW will come into effect from 1 March 2024.

The NMW determination also includes the vulnerable sectors of farm workers and domestic workers – who since 2022 have been aligned with the NMW rates.

However, the workers employed on an expanded public works programme are entitled to a minimum wage of R15,16 per hour (increased from 2023’s R13,97). Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act, 1998, are entitled to the allowances as determined in the latest government schedule.

The schedule of learnerships, and sectoral determinations of Contract Cleaning, Wholesale and Retail sector employees have also been published in this notice, and on the department's website – www.labour.gov.za.

The Act applies to all workers and their employers except members of the South African National Defence Force, the National Intelligence Agency and the South African Secret Service. The act does not apply to a volunteer, who is a person who performs work for another person and who does not receive, or is not entitled to receive, any remuneration for his or her service.

The NMW is the minimum amount of pay that an employer is legally required to remunerate employees for work done. The amount does not include payment of allowances (such as transport, tools, food, or accommodation) payments in kind (board or lodging), tips, bonuses and gifts among others.

The NMW is the floor level below which no employee should be paid. The NMW first came into implementation in 2019 at a minimum of R20 per hour. The NMW is enforced by law and violations are subject to fines.

In summary, the NMW is now R27.58 for each ordinary hour worked.

As in previous years, the adjustment provides exceptions for several worker groups, including:

• Farmworkers are entitled to a minimum wage of R27.58 (was R25.42) per hour;

• Domestic workers are entitled to a minimum wage of R27.58 (was R25.42) per hour;

• Workers employed on an expanded public works programme are entitled to a minimum wage of R15.16 (was R13.97) per hour;

• Workers who have concluded learnership agreements contemplated in section 17 of the Skills Development Act, 1998 (Act No 97 of 1998), are entitled to allowances contained in Schedule 2.

The following sectors have also been substituted with the information set out in this notice:

• Sectoral determination 1: Contract Cleaning Sector

• Sectoral Determination 9: Wholesale and Retail Sector

Click here to download the Government Gazette:

https://www.gov.za/sites/default/files/gcis_document/202402/50073rg11664gon4331.pdf 

Relevance to Auditors, Independent Reviewers & Accountants:

• The National Minimum Wage Act 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 consider compliance with the National Minimum Wage Act in your workplace, and at home.

Relevance to Your Clients:

• An entity (company or close corporation) and individual employers must comply with the Companies Act.

• It is illegal and unfair labour practice for an employer to unilaterally change working hours or other employment conditions to implement the NMW.

• As an employer, your clients also need to consider compliance with the National Minimum Wage Act in their workplace, and at home.

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