Update to the Basic Conditions of Employment Act for employees earning more than R21,200 a month
The Department of Employment and Labour changed the earnings limit for the Basic Conditions of Employment Act. Workers earning over R21,200 a month in 2024 will lose some automatic protections.
In South Africa, the earnings threshold decides when workers no longer have certain protections under the BCEA. These protections include rules for work hours, overtime pay, and holiday pay.
As of 1 April, the new threshold will be R254,371.67 – an increase of R3,261.08 from the 2023 earnings threshold of R241,110.59.
The threshold equates to just under R21,198 per month.
Legal professionals, Brett Abraham and Mehnaaz Bux, who are partners at Webber Wentzel, state that employees with earnings above a certain limit do not qualify for specific protections that are available to those earning less than that limit.
Under the BCEA, employees who earn more than the threshold are not covered by certain regulations.
- Ordinary hours of work;
- Overtime;
- Compressed working weeks;
- Averaging of hours of work;
- Meal intervals;
- Daily and weekly rest periods;
- Sunday pay;
- Pay for night work; and
- Pay for work on public holidays.
The provisions only apply to employees earning below the threshold.
Workers with salaries exceeding the set limit are not subjected to the stipulations applicable to temporary employment services (labour brokers) and fixed-term employment regulations under the Labour Relations Act.
Under the Employment Equity Act, workers with earnings surpassing the set limit cannot bring up disputes related to unjust discrimination to the CCMA for arbitration, unless it involves sexual harassment or all involved parties consent to arbitration. Such cases should be managed by the Labour Court.
"The rise in the earnings threshold could lead to a larger number of workers qualifying for the enhanced protections provided by labor laws, like overtime compensation.
"This could potentially lead to financial implications for employers. It is crucial for all employers to carry out an evaluation to guarantee that the rise and its effects are considered in the workplace.
If required, modifications to the employment agreements or compensation structures should be made to minimize the risk of unintentional violations of the BCEA or the applicable provisions for non-standard employment arrangements," stated the specialists.
What are earnings?
To see if an employee makes more than the earnings limit, we look at their yearly pay, not including any bonuses.
- Before the deduction of income tax;
- Before the deduction of pension fund contributions;
- Before the deduction of medical aid contributions and similar payments;
- Excluding similar contributions made by the employer in respect of the employee.
This means that subsistence and transport allowances, achievement awards, and overtime payments are not considered as part of the salary.
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