The National Minimum Wage (NMW) adjustment was announced in the Government Gazette of 2 February 2024, to come into effect on 1 March 2024. A minimum wage is the lowest remuneration employers can legally pay their employees for each ordinary hour worked. It is illegal for an employer to pay employees less than this minimum floor.
The NMW Commission comprises representatives from organised labour, business, community and experts in the field of labour market- and employment conditions It considered 3 proposals for the 2024 increase for the NMW. Factors considered by the
Commission in the annual adjustment include:
Inflation;
The cost of living and the need to retain the value of the minimum wage;
Wage levels and collective bargaining outcomes;
Gross Domestic Product (GDP);
The ability of employers to carry on their businesses successfully;
The operation of small, medium or micro-enterprises and new enterprises; and
The impact on employment or the creation of jobs.**
Considering the above factors, the three proposals tabled in the report are as follows:
The majority recommendation is the Consumer Price Index (CPI)* plus 3%. Eight of the 12 commissioners proposed that the national minimum wage increase by CPI plus 3%;
The recommendation by the Business Constituency is only CPI; and
The recommendation by an independent expert is CPI plus 0.75%.
*The CPI is a measure of the change in prices as paid by consumers for goods and services over time. In South Africa, the latest consumer price inflation, as published by Statistics South Africa, was 5.9% in October 2023, up from 5.4% in September 2023.
**It is of concern that the impact on employment or the creation of jobs appear not to have been taken into account. In the current economic climate this which should have been the prime consideration.
The public were invited to comment on the report of 12 December 2023 and given until 8 January 2024 to make their written representations. This can be seen as a cynical move by the department by sneaking the report and invitation to comment in during the holiday period, when the least resistance can be expected.
In 2021, the Commission recommended increasing the national minimum wage from R20,76 to R21,69 per hour. The 2022 national minimum wage was revised from R21,69 to R23,19 per hour. In 2023, the minimum wage was adjusted to R25.42 per hour. For 2024 the minimum wage will increase by another 9% – meaning the wage will be revised to R27.58 per hour in 2024.
The report was published in the Government Gazette of 12 December 2023 and the notice of implementation of 2 February can be downloaded from the MBF website: https://www.mafubebf.org/post/national-minimum-wage-effective-1-march-2024
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