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An Increase in the BCEA Earnings Threshold and National Minimum Wage

South Africa
07/03/2024
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On 5 March 2024, the Department of Employment of Labour (“DEL”) published a government gazette providing for an increase of the earnings threshold in terms of section 6(3) the Basic Conditions of Employment Act 75 of 1997 (“BCEA”).  This represents a 5,5% increase from the previous threshold of R241,110.59 per annum to R254,371.67 per annum (being R21,197.63 per month). This increase will take effect from 1 April 2024.

For those employers who pay employees at or around the earnings threshold, it is important for such employers to review such employees’ remuneration and to access whether certain of its employees will now fall below the new earnings threshold.  

Employees who earn below the earnings threshold are entitled to additional basic conditions of employment such as the payment of overtime, limited working and overtime hours, daily and weekly rest time and additional pay for work on Saturdays, Sundays and public holidays.

In addition to the above, there is also a significant consequence in terms of the Labour Relations Act 66 of 1995 in respect of employees who earn below the earnings threshold and who are employed on a fixed term or part-time basis and in respect of those who are employed by temporary employment service providers, also known as a labour brokers.

In addition to the increase in the earnings threshold, on 2 February 2024, DEL implemented an increase in the national minimum wage of approximately 8,5%, from R25.42 to R27.58.  This increase was effective from 1 March 2024.

This increase is also applicable to farm workers and domestic workers.  Workers employed on an expanded public works programme, have had their national minimum wage increased from R13.97 to R15.16 per hour and workers engaged through learnerships in terms of the Skills Development Act 97 of 1998, have had their allowances increased between R415.07 to R2 421.13 depending on the learners’ NQF level and the learners’ credits.

Employers who employ employees at the national minimum wage, are similarly urged to review their employees’ wages to ensure compliance with the increased tariffs and to the extent that such tariffs cannot be met, to urgently apply for an exemption.

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