07/03/2024
BUSINESS
Staff Writer
6 Mar 2024
Big change for employees in South Africa now earning more than R21,200 a month
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The Department of Employment and Labour has made adjustments to the earnings threshold that applies to the Basic Conditions of Employment Act (BCEA) – meaning any workers whose salaries have increased beyond R21,200 a month in 2024 will lose certain automatic protections.
The earnings threshold is the level at which workers in South Africa lose automatic protections under the BCEA, related to things like ordinary hours of work, overtime and public holiday pay.
As of 1 April, the new threshold will be R254,371.67 – an increase of R3,261.08 from the 2023 earnings threshold of R241,110.59.
The threshold equates to just under R21,198 per month.
According to legal experts, Brett Abraham and Mehnaaz Bux, Partners at Webber Wentzel, employees who earn above the threshold are not entitled to certain protections afforded to workers who earn below the threshold.
In terms of the BCEA, employees earning in excess of the earnings threshold are excluded from the provisions which regulate:
Ordinary hours of work;
Overtime;
Compressed working weeks;
Averaging of hours of work;
Meal intervals;
Daily and weekly rest periods;
Sunday pay;
Pay for night work; and
Pay for work on public holidays.
The provisions only apply to employees earning below the threshold.
“Employees earning above the threshold are (also) not subject to the deeming provisions that apply to temporary employment services (labour brokers) and fixed-term employment provisions under the Labour Relations Act,” they said.
In the Employment Equity Act, employees earning above the threshold are not allowed to refer disputes relating to unfair discrimination to the CCMA for arbitration unless it is related to sexual harassment or all parties agree to arbitration. These need to be handled by the Labour Court.
“The increase to the earnings threshold may result in an increased number of employees becoming entitled to the stricter protections afforded to such employees in labour legislation, such as overtime payments.
“This may, in turn, have financial consequences for employers. An assessment should be conducted by all employers to ensure that the increase and its consequences are accounted for in the workplace and, where necessary, that changes to the employment contracts or remuneration structures are affected in order to mitigate the risks of any unintended contraventions of the BCEA or the deeming provisions applicable to atypical employment arrangements,” the experts said.
What are earnings?
For purposes of determining whether an employee earns in excess of the earnings threshold, “earnings” means an employee’s regular annual remuneration:
Before the deduction of income tax;
Before the deduction of pension fund contributions;
Before the deduction of medical aid contributions and similar payments;
Excluding similar contributions made by the employer in respect of the employee.
This is subject to the proviso that subsistence and transport allowances received, achievement awards and payments for overtime worked do not fall within the scope of remuneration.
