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The new National Minimum Wage takes effect on 1 March and, while it may look like a simple payroll update, it is not. It is also a legal compliance check.

SMME owners, and HR managers and payroll teams; especially those in labour-intensive sectors are advised to treat the new minimum wage requirements as a statutory obligation under the National Minimum Wage Act 9 of 2018. Employers that fail to implement the updated wage rates, or that do so incorrectly, face incurring penalties, disputes, and operational disruptions.

To help ensure compliance, Clientèle Legal breaks down the requirements into five areas:

1. Classify your employees correctly
   Not every employee is covered by the same rate, and this is where many businesses make mistakes.From 1 March, the minimum wage, which also applies to domestic and farm employees, is R30.23 per hour.

   Employees in the Expanded Public Works Programme (EPWP) must be paid R16.62 per hour.

   Learners on registered learnerships must be paid allowances in line with the Act, linked to NQF levels. Learnership agreements must also comply with section 17 of the Skills Development Act 97 of 1998.

2. Remember that the law overrides the contract
   Even if an employment contract reflects the old rate, the new minimum wage applies from 1 March. Paying below the new rate, even if contracts have not yet been updated, still counts as non-compliance.

3. Check your sector’s rules
   Certain sectors have extra rules on top of the general minimum wage. These include contract cleaning, as well as wholesale and retail.For example, in the cleaning sector, Section 200B of the Labour Relations Act 66 of 1995 can hold employers responsible if pricing makes compliance impossible. Oversight along the supply chain is also increasing, so small businesses cannot assume that they are automatically shielded from scrutiny.

4. Get approval if you want exemption
   Temporary exemptions are possible, but they are tightly controlled. Employers who truly cannot afford the increase must apply through the National Minimum Wage Exemption System and provide full financial disclosure. There is no automatic relief, so paying below the minimum without approval counts as non-compliance.

5. Accept that compliance is non-negotiable
   Clientèle Legal emphasises that failure to pay the updated minimum wage is not a simple administrative error. It is a breach of the law, with consequences that can include enforcement orders from the Department of Employment and Labour, fines and penalties, and disputes over unfair labour practices that end up with the CCMA.“For small businesses operating on tight margins, and labour-intensive operations, a proactive compliance check now can protect your business from avoidable legal exposure later. Partnering with a legal expert can help to prevent missteps that could have financial, operational, and reputational consequences,” says a Clientèle Legal representative.

   Clientèle Legal also advises employees to check their payslips and consult with a legal professional if they are not being paid in accordance with the Act.

ENDS 

About Clientèle Limited

Clientèle Limited, a diversified financial services group listed on the JSE and a licensed controlling company of the Clientèle Insurance Group, has for over 30 years led South Africa’s direct distribution of easy-to-understand life and non-life insurance products via Clientèle Life (FSP15268) and Clientèle Legal (FSP34655).

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