NEW NATIONAL MINIMUM WAGE GETS CLOSER TO IMPLEMENTATION WITH RELEASE OF NEDLAC REPORT
On 20 November 2016, the report of the advisory panel to National Economic Development and Labour Council (Nedlac) on the issue of a national minimum wage was published. It recommended a national minimum wage of ZAR 3500 per month, or R20 per hour, to be phased in over two or three years. This was stated to be higher than the current wages of almost 50% of employed South Africans.
"It is not yet clear whether this is the minimum wage that will finally be implemented, or when it will be implemented. But we may reasonably expect it to happen during 2017," says Chris Todd, Head of Employment at Bowmans in South Africa.
Todd explains that there have been ongoing discussions at the National Economic Development and Labour Council (Nedlac) about the national minimum wage in the past few years. Representations and public hearings on the issue took up a significant amount of time and energy in 2015 and have continued through 2016.
"The potential impact of a national minimum wage is that if it is set too low, in an effort to avoid destroying jobs in the lowest paid sectors, it will have little impact in higher paid sectors. On the other hand, if it is set too high, this may negatively affect jobs across the economy.
"The government’s public statements are, however, clear. While the appropriate wage level must still be divined by an advisory panel, it will push ahead to introduce a minimum wage," adds Todd.