SA minimum wage hike’s impact on workers and employers
The recent minimum wage increase to R28.79 per hour in South Africa has sparked concerns over financial strain, with employers adjusting hours and job responsibilities to cope.
POLOKWANE – The recent increase in South Africa’s minimum wage to R28.79 per hour has raised concerns about the financial sustainability of wage hikes for both employers and low-income employees.
While intended to improve workers’ earnings, the adjustment is causing strain on employers – many of whom are taxpayers facing rising living costs. Some employees, meanwhile, are forced to make financial compromises to sustain their livelihoods.
The new wage rate takes effect on March 1, as per the Department of Employment and Labour.
It applies to employees working at least 24 hours per month, as mandated by the Basic Conditions of Employment Act. This amount, however, excludes additional benefits, allowances, and tips.
Employers interviewed by Polokwane Observer admitted to reducing working hours for domestic workers and gardeners in recent years to comply with rising hourly wage requirements.
Some have also limited job responsibilities to essential tasks, such as child-minding and laundry for children, instead of additional duties like cooking and overall laundry.
Local economist Baneng Nape is of the opinion that middle-class employers are feeling the financial squeeze, balancing wage increases alongside rising fuel prices, municipal service fees, food, and school costs – on top of taxation.
“Many employers cannot afford to pay around R4 300 per month for a full-time domestic worker, especially with fluctuating repo rates affecting vehicle and home loan repayments,” he said.
While the Department of Employment and Labour requires domestic workers to be registered for Unemployment Insurance Fund (UIF) contributions, some workers told Polokwane Observer they prioritise earning a stable income over compliance with labour regulations.
One 45-year-old domestic worker from Flora Park, whose name is withheld, said that securing long-term employment was more important than strictly receiving the minimum wage. “I’m not too concerned about the wage amount. Work is scarce, and gaining my employer’s trust ensures job security for my children’s sake,” she said.
She said she supplements her income by working for multiple households. “My main job is child-minding four times a week from 15:00 to 18:00, but I take on extra washing jobs or even overnight stays when my employer is away. This helps cover transport, municipal bills, and food expenses.”
Nape also warned that employers risk a R40 000 fine or up to one year in prison for hiring undocumented foreign workers, many of whom are paid below the legal minimum wage.
Additionally, occupational compliance specialist Gerhard Geyser stated that non-compliance undermines lawful job creation efforts, increasing social tensions in the country.
To calculate the minimum wage:
R28.79 × (number of hours worked per month) Employee Rights: Tips workers who work fewer than four hours per day must still be paid for four hours.
If wages are not paid correctly, employees can lodge a complaint with the Department of Employment and Labour or the CCMA.
