The Minister of Employment and Labour has published a new earnings threshold in terms of the Basic Conditions of Employment Act (BCEA).
New threshold: R269,600.90 per annum (approx R22 466 per month)
What this means: Employees earning ABOVE this threshold are excluded from certain provisions of the BCEA, specifically those regulating:
- Ordinary hours of work
- Overtime
- Compressed and averaged working hours
- Meal intervals and rest periods
- Sunday and public holiday pay
- Certain aspects of night work
Important Note: below this threshold, employees qualify for overtime pay, Sunday overtime pay and payment for working on public holidays that fall on a normal day.
Practical Implications:
- We recommend that employers review the terms and conditions applicable for employees who may now qualify for overtime payment.
- Apply the correct definition of earnings.
Earnings, in this context, is defined as regular annual remuneration before deductions, excluding contributions to pension, medical and similar payments and excluding subsistence allowances, transport allowances, achievement awards (eg discretionary bonuses, once off incentives or spot bonuses), and excluding overtime.
Technical note: the context is important when applying the definition of earnings. In other contexts, eg when calculating payments for the annual leave, notice pay and severance pay, certain allowances and contributions to pension, medical aid, group life schemes and such like are included in the definition of earnings.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE).