A new earnings threshold raising the level at which employees qualify for certain protections under the Basic Conditions of Employment Act took effect on May 1. On the surface, the 3% adjustment to R269,601 a year or R22,467 a month appears modest. In practice, it alters how a greater portion of the workforce must be managed.
The new threshold determines which employees are automatically covered by provisions regulating working hours, overtime, rest periods and certain pay conditions. Employees earning below the threshold are automatically entitled to these protections.
The threshold increase has a dual impact. Some employees whose earnings were previously above the threshold may now fall below it and gain additional protections. For employers, these employees’ existing arrangements and employment contracts must become compliant.
The first step for employers is to understand what must be assessed. “Earnings” refer to an employee’s regular annual remuneration before deductions. It includes salary and regular payments but excludes allowances such as transport or subsistence, as well as overtime and performance-related awards. Misinterpreting what qualifies as earnings can result in incorrect classification and unintended noncompliance.
