Legislation: Minimum wage exemption regulations gazetted

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Legislation: Minimum wage exemption regulations gazetted

Regulations prescribing the process to be followed and information provided when applying for an exemption from paying the national minimum wage have been gazetted and will be effective from 1 January 2019, when the Act comes into force. This, reports Pam Saxby for Legalbrief Policy Watch, is noting that an exemption may only be granted if the Department of Labour is satisfied not only that the employer concerned cannot afford to pay the minimum wage, but also that affected workers have been ‘meaningfully consulted’ – either directly or through their trade union representatives. Affordability will be determined by an enterprise’s profitability, liquidity and solvency position, which will be assessed using methodologies detailed in the regulations under ‘system notes’, along with the discrepancies likely to trigger an audit.

Should an exemption be granted, the employer will nevertheless be required to pay affected workers no less than 90% of the minimum hourly rate of R20. In the case of farm and domestic workers, the threshold below which no exemption may be granted is likely to be 90% of R18 and R15 per hour respectively, in keeping with the requirements of the Act’s Schedule 1. However, at the time of writing a presidential proclamation to that effect had yet to be gazetted. The regulations also prescribe the circumstances in which an exemption may be withdrawn, as well as the procedures entailed. Applications are to be lodged using the online exemption system.

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