Minimum wage 2023: what to expect
In terms of the National Minimum Wage Act (NMWA), the National Minimum Wage Commission (the Commission) annually assesses and reviews the national minimum wage. The Commission then submits a recommendation to the Minister of Employment and Labour to adjust the minimum wage. The current national minimum wage came into effect on 1 March 2022, and the highly anticipated review of this wage for the 2023/2024 period is almost upon us. This will likely be released and published in the Government Gazette by the Minister and come into effect on 1 March 2023.
The criteria the Commission generally uses to determine the proposed increase is the consumer price index (CPI) plus 1.0%. The CPI was 7.2% in December 2022, and the minimum wage increase is thus calculated at approximately 8.2%. This means an increase in the current national minimum wage of R23.19 per hour to R25.09 per hour (based on December 2022’s CPI as released by Statistics South Africa on 18 January 2023 – available when this article was written).
However, the Department released a media statement on 22 December 2022, which indicated that the Commission, in its preliminary report, was looking at an annual increase in the national minimum wage in the range of CPI + 0.5% and CPI +1% for 2023.
Are there options for businesses that cannot afford to pay minimum wages?
However, section 15 of the NMWA stipulates that employers can apply online for exemption if they cannot afford the national minimum wage (http://nmw.labour.gov.za). The employer will still have to pay at least 90% of the national minimum wage if the exemption is granted. In addition, the exemption is only valid for a maximum period of 12 months.
IS YOUR BUSINESS LABOUR-COMPLIANT?
FIND OUT NOW.