New Minimum Wage Proposal


6 December 2020

The new proposed minimum wage could see more equitable pay for South Africa’s most vulnerable workers.

The National Minimum Wage Commission has recommended that the earnings of the lowest-paid labourers — farm and domestic workers — be brought into line with that of other workers.

According to the review report, most commissioners recommend that the minimum for farmworkers is aligned with the national minimum wage in 2021 and that for domestic workers by 2022.

If the proposal gets the green light, the national minimum wage will increase by 4.5%. This increase is 1.5% above inflation. For farmworkers, the minimum wage will increase by 16.1%, and domestic workers will get a 20.65% increase.

Farm and domestic workers have been excluded from labour legislation aimed at protecting workers’ rights. This did not change when the National Minimum Wage Bill was first introduced in 2018. Though the proposed R20 an hour minimum wage was widely considered too low, it was set even lower for farm and domestic workers at R18 and R15 an hour respectively. This is despite these two groups representing almost two million workers.

But the proposed adjustments have already received some pushback from the opposition. In a statement released earlier this week, the Democratic Alliance said it opposed the wage hike because it may result in job losses — an argument the party has been advancing since the minimum wage was first up for debate. “This is especially important at a time when Covid-19 and the associated national lockdowns have wreaked havoc on the economy. Retrenchments are on the rise, and unemployment is at an all-time high.”

According to its statement, the DA supports sustainable wage increases in the agricultural and domestic service sectors but believes that increases should not be forced by way of regulation.

The National Minimum Wage Commission’s business representatives hold a similar view. “Employers of domestic workers are mostly employees themselves in other sectors,” its minority recommendation reads. “With most sectors already reducing or maintaining salaries, and retrenchments expected to peak, it is reasonable to expect that employers of domestic workers are going to struggle to either absorb huge wage increases or even keep their employees.”

The recommendation adds that research has shown that big shocks in the movement of legislated wages cause extensive job losses in the agricultural sector.

The business representatives support a phase-in over four years for farm and domestic workers.

There is still little indication that the initial minimum wage had any effect on job losses, because the long-promised report by the National Minimum Wage Commission has yet to be released.