Minimum Wage Exemption Process

The application for exemption is on line at https://nmw.labour.gov.za/.

Maximum Exemption: There will never be a full exemption of the minimum wage.  The most successful exemption will be a 10% reduction.

The R20 per hour minimum for all employees can be reduced to R18 per hour.  Farm Workers’ R18 per hour can be reduced to R16.20 per hour and Domestic Workers R15 per hour can be reduced to R13.50 per hour.

Conditions: An exemption will only be granted if:

* the employer cannot afford to pay the national minimum wage; and
* representative trade unions or employees have been consulted.
* Complete compliance with statutory payments and obligations, including UIF, Workmens’ Compensation and Bargaining Council Collective Agreements.  If this has not been done - don’t bother applying for exemption.

Employers will be required to submit audited financial statements, household income, commercial balance sheets, working hours, proof of consultation, motivation and any other documents as evidence to justify the application for exemption.

To assess affordability, the Department will take elements of profitability, liquidity and solvency into account.

Bargaining Council Minimums: If the Bargaining Council/Sectoral Determination;s minimum wage is Less than R20 per hour, then the national minimum wage takes precedence.  Those wages will need to increase to R20 and hour, regardless of the Bargaining Council or Sectoral Determination’s minimum wage.

How long?  Exemption will never be more than 12 months from the date of application.

Dishonesty: If an employer has lied in an application, or it’s financial position improves, the exemption can be withdrawn.  Any person affected by the exemption can apply to have the exemption withdrawn.

While you wait:  Until exemption is granted, all employers are required to pay the minimum wage.  Should an employer fails to do so they can be reported to the Department of Labour or deal with a dispute at the CCMA.

In January 2021 The Minister will announce the adjustment to the national minimum wage.

Mark - 14:02 @ common, Industrial Relations, Human Resources, B-BBEE