National minimum wage: Negotiate affordable employment structure rather than laying off your domestic worker, urges labour law lawyer

Negotiate a new employment structure if you cannot afford your domestic worker any longer, says labour law specialist Tracy van der Colff after the news of a possible hike in minimum wages for 2021.

Van der Colff, of the firm Baker McKenzie in Johannesburg, urged employers not to lay domestic workers off because of a proposed increase of 4,5% in the national minimum wage.

The National Minimum Wage Commission led by Prof Adriaan van der Walt, of the Nelson Mandela University, recently published the commission’s proposals for an increase in the national minimum wage in the Government Gazette.

One of the proposals is to increase the wage to R21,70 per hour, but a final decision has still to be taken. There are even proposals for higher increases of 16,1% and 22,6% respectively for farm and domestic workers in order to bring these two sectors closer to the national minimum wage overall.

The proposals were published for public comments until November 19, and if accepted should be implemented early in 2021. However, it is reported that the 12 members of the commission are divided on the issue.

Most of the commissioners recommended that the national minimum wage be increased by the rate of inflation, plus an additional 1,5%.

As of September, the inflation rate is measured at 3% so this will equal a 4,5% increase. The national minimum wage was set to R20 an hour in 2018. In 2019, it made the recommendation that the national minimum wage be increased at the rate of inflation for the poorest decile of households for March 2020.

Therefore, the national minimum wage increased from R20 to R20,76 an hour from March 2020. An increase of 4.5% would effectively raise the minimum wage by around a further 93 cents to R21,69.

This is still well below the desired increase of R22,50 which had previously been floated by the country’s major unions. Van der Colff told Izak du Plessis what to expect from the proposed changes and how employers can soften the blow.

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