On 1 June 2012, the Minister of Labour announced that with effect from 1 July 2012, employees earning more than the new monetary threshold of R183 008 per year will be excluded from protection under certain sections of the Basic Conditions of Employment Act, 1998 (the BCEA). The previous threshold was R172 000 per year.
Employees earning more than the monetary threshold per year will be affected as follows:
- They cannot insist on only working a minimum of 45 hours in any week without receiving overtime pay (sections 9 and 10);
- They are excluded from sections 11 and 12 which regulate compressed working weeks and the averaging of working hours;
- They cannot insist on a 1 hour meal interval provided for by section 14 of the BCEA;
- Similarly, they cannot insist on daily and weekly rest periods between ending and recommencing work (section 15 of the BCEA);
- They will not automatically qualify to be paid for work done on Sundays (section 16 of the BCEA);
- They do not qualify for the protection afforded in relation to night work (section 17(2)); and
- They are not automatically entitled to additional pay for work performed on public holidays as provided for in section 18(3) of the BCEA.
The definition of ‘earnings’ remains the same. In calculating an employee’s annual earnings for purposes of the monetary threshold, ‘earnings’ means the regular annual remuneration before any deductions such as income tax and pension and medical payments. Earnings exclude contributions which the employer makes in respect of the employee (for instance contributions towards medical aid and pension funds). In particular, subsistence and transport allowances, achievement awards and payment for overtime worked are not regarded as remuneration for the purpose of calculating an employee’s earnings.
The potential pool of employees who automatically qualified for overtime pay and for additional remuneration for work performed on week-ends and public holidays during the past year (from 1 July 2011 until 1 July 2012) may no longer be the same. Employers must therefore ensure that all employees earning less than the new threshold of R183 008 per year will be paid the correct overtime pay and pay for work performed on week-ends and public holidays. It is recommended that all employers go through their collective agreements, letters of appointment and policies regulating working hours and additional pay to ensure that they are updated to reflect the increase in the threshold.
Director - Johannesburg
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