Minimum wage exemptions will leave workers worse off than before, NGO says
The exemption provided for in regulations under the National Minimum Wage Act means that workers in some sectors will, in effect, be earning poverty wages, the Pietermaritzburg Economic Justice & Dignity Group said in a statement.
“When the national minimum wage was first mooted, it was said that it would help the 6.7-million lowest paid workers earning less than R4,000 a month. Now that the National Minimum Wage Act has been passed and with the publication of the regulations, which see exemption thresholds taking 10% off the hourly rate for workers, the wages of many of the most vulnerable workers will be set even lower than the current sectoral determinations,” the group's programme co-ordinator, Mervyn Abrahams, said.
“We had been promised that the national minimum wage would come in at a higher level than the sectoral determinations, as this rate is already considered by many workers as a poverty wage. The introduction of the national minimum wage regulations will mean that many workers will be even worse off than they were before.”
The group said this meant the national minimum wage at the exemption rate of 10% meant that general workers will be remunerated at R18 an hour instead of R20, farm workers at R16.20 an hour instead of R18 and domestic workers at R13,50 an hour instead of R15.
“The poverty level national minimum wage will substantially compromise household affordability and nutrition, negatively impacting productivity in the workplace and reinforcing the cycle of low wages, low economic productivity and low economic growth. It will result in the destruction of the body, the family and household, society, our health system, education system and the economy,” Abrahams said.
He said the application of the national minimum wage could have been a very simple process.
“Affected workers could have earned a standard R20 hourly rate (if it had to be that), and all workers would have known that amount. Instead, with the exemption thresholds and the 6% return on assets to qualify for exemptions, and various other loopholes, it will not only be extremely difficult to ensure compliance and onerous to check if corporates really do qualify for exemptions, but workers themselves might struggle to get the necessary information as to what level they should be paid. This has the potential for labour unrest.
“Assuming that the bulk of the corporate sector will seek some form of exemption and this exemption will then become the norm; workers will in fact be worse off.”