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CityPress - - Business -

How do you feel about a na­tional min­i­mum wage? Do you think it is enough? Do you feel it is en­force­able? SMS us on 35697 us­ing the key­word WAGE and tell us what you think. In­clude your name and prov­ince. SMSes cost R1.50 does the na­tional min­i­mum wage also af­fect Sec­tor Ed­u­ca­tion and Train­ing Au­thor­ity funds?” asked God­frey. The em­ploy­ment tax in­cen­tive (ETI) will also un­dergo a dra­matic trans­for­ma­tion un­less spe­cific rules around it are part of the na­tional min­i­mum wage bill.

The sub­sidy has grown far beyond the ini­tial in­ten­tions and has be­come a multi­bil­lion-rand ex­pense – and an im­por­tant prop for many com­pa­nies’ prof­its. Or­gan­ised busi­ness has been ad­vo­cat­ing the en­large­ment of the sub­sidy to pay for the min­i­mum wage in “dis­tressed” sec­tors.

Even with­out an ex­pan­sion, the na­tional min­i­mum wage will au­to­mat­i­cally lead to higher sub­si­dies.

The ETI cov­ers young work­ers earn­ing be­tween R12.50 and R37.50 an hour, and all the sub­sidised jobs un­der R20 will have to ad­just to this min­i­mum.

Ac­cord­ing to Treasury’s re­port on the sub­sidy, re­leased last year, more than half the sub­sidised work­ers earned less than R2 809 in 2014/15.

Ad­justed for in­fla­tion, that would still leave more than half of ETI-sub­sidised jobs un­der the na­tional min­i­mum wage if it gets im­ple­mented on time next year.

The de­sign of the ETI gives the max­i­mum R1 000 sub­sidy only to jobs pay­ing more than R2 000. Those pay­ing less get ei­ther R750 or R500.

If all jobs get paid the R20 na­tional min­i­mum wage, all the cur­rent sub­si­dies that are less than R1 000 will have to be­come R1 000, po­ten­tially fur­ther es­ca­lat­ing the cost of the ETI.

An­other ma­jor con­cern is what will hap­pen to the ex­ist­ing sys­tem for set­ting sec­toral de­ter­mi­na­tions in un­or­gan­ised sec­tors such as con­tract clean­ing, do­mes­tic and farm work.

“Our sense is that the sec­toral de­ter­mi­na­tions will be­come dor­mant with seem­ingly no way to up­date them,” said God­frey.

“They will be cast in stone and be­come in­creas­ingly ir­rel­e­vant over time.”

The de­ter­mi­na­tions do not just set a min­i­mum wage per sec­tor, but also a whole hi­er­ar­chi­cal sched­ule of wages per oc­cu­pa­tion. If these are not up­dated and only the na­tional min­i­mum wage is reg­u­larly re­viewed, it would com­press the other wages to­wards the min­i­mum.

De­ter­mi­na­tions are set by the Em­ploy­ment Con­di­tions Com­mis­sion, which will ap­par­ently cease to ex­ist when the na­tional min­i­mum wage bill is en­acted.

In­stead, a na­tional min­i­mum wage com­mis­sion will be cre­ated to re­view it.

There is a fear that it will mostly be the min­is­ter of labour who ul­ti­mately de­cides what hap­pens with the com­mis­sion’s rec­om­men­da­tions.

“Ar­guably, re­view­ing the na­tional min­i­mum wage will be as im­por­tant as set­ting it,” said God­frey.

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