‘Too many ex­emp­tions’ in new wage laws

Unions and ac­tivists dis­sat­is­fied be­cause fewer work­ers than ex­pected will ben­e­fit from min­i­mum lev­els

Business Day - - FRONT PAGE - Theto Mahlakoana Po­lit­i­cal Writer [email protected]­nesslive.co.za

Or­gan­ised labour has cri­tiqued the na­tional min­i­mum wage reg­u­la­tions that have set the con­di­tions for em­ploy­ers’ ex­emp­tions from pay­ing the leg­is­lated R20 per hour. The reg­u­la­tions signed by labour min­is­ter Mil­dred Oliphant in De­cem­ber 2018 in­clude thresh­olds be­low which no ex­emp­tions will be granted, in­clud­ing do­mes­tic work­ers, al­ready set to earn be­low the min­i­mum wage.

Or­gan­ised labour has cri­tiqued the na­tional min­i­mum wage reg­u­la­tions that have set the con­di­tions for em­ploy­ers’ ex­emp­tions from pay­ing the leg­is­lated R20 per hour.

The new min­i­mum wage regime, which came into ef­fect on Jan­uary 1 and has been lauded for be­ing the most pro­gres­sive labour law pol­icy since democ­racy, will ben­e­fit fewer work­ers than ex­pected as a re­sult of the ex­emp­tions.

More than 6-mil­lion work­ers who cur­rently earn be­low the R20 hourly rate were ear­marked to ben­e­fit.

The ex­emp­tions de­tail cir­cum­stances un­der which em­ploy­ers could pay as lit­tle as R18 per hour if it is found that they qual­ify not to pay the full amount. Ac­cord­ing to the reg­u­la­tions, em­ploy­ers would have to prove that they can­not af­ford to pay work­ers the rate due to in­suf­fi­cient profitabil­ity and as­sets, among oth­ers, be­fore be­ing granted ex­emp­tions.

Em­ploy­ers who ap­ply for the ex­emp­tions will be re­quired to dis­close full fi­nan­cial state­ments of their busi­nesses for a pe­riod of three years to de­ter­mine whether or not they can be ex­empt. Dif­fer­ent rules ap­ply to non­profit or­gan­i­sa­tions.

The reg­u­la­tions signed by labour min­is­ter Mil­dred Oliphant in De­cem­ber in­clude thresh­olds be­low which no ex­emp­tions will be granted, in­clud­ing in re­spect of do­mes­tic work­ers, who are al­ready set to earn be­low the min­i­mum wage.

The Ca­sual Work­ers Ad­vice Of­fice, which rep­re­sents con­tract work­ers, has de­scribed the reg­u­la­tions as a de­par­ture from the pub­lished drafts in May 2017, say­ing the fi­nal law that was pub­lished in De­cem­ber would see a large num­ber of com­pa­nies al­lowed to pay a “much lower fig­ure than the R20 rate”.

Con­tract work­ers are some of the main ben­e­fi­cia­ries of the leg­is­la­tion.

“It was al­ready prob­lem­atic that em­ploy­ers could ap­ply for ex­emp­tions from a low fig­ure, but in the fi­nal pub­li­ca­tion, reg­u­la­tions were drafted in a way that al­lows a large num­ber of com­pa­nies to be able to claim ex­emp­tions,” said ad­vice of­fice spokesper­son Igshaan Schroeder. The ad­vice of­fice was al­ready han­dling cases of work­ers whose em­ploy­ers had re­duced their wages in line with the min­i­mum wage, which is un­law­ful.

Cosatu par­lia­men­tary of­fi­cer Matthew Parks said the fed­er­a­tion would mon­i­tor how many busi­nesses were ap­ply­ing for the ex­emp­tions be­fore tak­ing up the is­sue.

Rob Cooper, who chairs the Pay­roll Au­thors Group of SA, said there would be no sym­pa­thy for em­ploy­ers who fail to pay the min­i­mum wage, adding that it had been “ex­ten­sively publicised and dis­cussed, par­tic­u­larly within the trade unions”.

Trade union mem­bers are well aware of the in­tro­duc­tion of the na­tional min­i­mum wage and will be at the Com­mis­sion for Con­cil­i­a­tion, Me­di­a­tion and Ar­bi­tra­tion (CCMA) “in no time if they find that they are not be­ing paid the cor­rect wage”, he said.

“The fines can be ret­ro­spec­tively ap­plied. An em­ployer can thus be caught 12 months down the line with fines ret­ro­spec­tive to the start­ing point of the non­com­pli­ance,” he said.

Some of the penal­ties in­clude ad­just­ing work­ers’ wages to twice the amounts owed. Non­com­pli­ance cases will be re­ferred to the CCMA.

How­ever, Schroeder said that the CCMA’s caseload had al­ready proven to be a bur­den on the or­gan­i­sa­tion and cast doubt on its abil­ity to han­dle the ex­pected “moun­tain” of cases as a re­sult of the min­i­mum wage im­ple­men­ta­tion.

THERE WOULD BE NO SYM­PA­THY FOR EM­PLOY­ERS WHO FAIL TO PAY THE MIN­I­MUM WAGE ... IT HAD BEEN ‘EX­TEN­SIVELY PUBLICISED‘

Mil­dred Oliphant

Mil­dred Oliphant

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