R28.79 per hour minimum wage crackdown in South Africa

South African businesses will be under increased scrutiny this year as the government plans to increase its capacity to ensure local companies follow regulations like the minimum wage.

In December 2024, the Department of Employment and Labour said its “Project 20,000” to enhance the Inspection and Enforcement Services’ oversight and enforcement capacity was well underway.

As part of building the capacity of the Inspectorate, the department will increase the number of inspectors from 2,000 to 20,000. 

The minister said this expansion will enhance the department’s ability to conduct thorough audits and inspections nationwide.

Webber Wentzel legal experts Mehnaaz Bux and Amy King said this initiative is particularly important for local businesses to consider in light of the increased minimum wage.

The Employment and Labour Minister Nomakhosazana Meth recently announced adjustments to the national minimum wage, which will take effect on 1 March 2025.

The national minimum wage will increase from R27.58 to ZAR 28.79 per ordinary hour worked. It applies to all employees covered by the Basic Conditions of Employment Act and domestic and farm workers.

This reflects an increase of around 4.38%, slightly below the recommendation made by the National Minimum Wage Commission. The commission proposed aligning increases with the Consumer Price Index plus 1.5%.

“We are committed to the implementation of social protection initiatives and wage increases, such as the introduction and implementation of the National Minimum Wage,” Meth said. 

“This ensures that workers receive their dues and are not exploited for the services they render. Every employer may not pay wages that are below the minimum wage.”

During the public comment period, when parties were allowed to make submissions to the National Minimum Wage Commission to inform the adjustment, trade unions called for stricter enforcement. 

COSATU urged the Employment and Labour Department to increase its enforcement powers and strengthen the role of labour inspectors.

Bux and King said South Africa saw a rise in labour inspections across various workplaces in 2024. 

“Given that the Minister of Employment and Labour has announced plans to increase the number of labour inspectors from 2,000 to 20,000, employers should anticipate greater regulatory scrutiny and enforcement to ensure compliance in 2025,” they said.

“Employers must ensure compliance with the revised minimum wage rates to mitigate the risk of enforcement action.” 

They said this entails companies reviewing their wage structures, engaging in collective bargaining where necessary, and preparing for increased labour inspections in 2025 in all aspects of their business.

Calls for higher wages

During the public participation process, some South African unions called for the national minimum wage to be increased to R15,000 per month as workers suffer from a rising cost of living.

SAFTU-affiliate, the General Industries Workers Union of SA (Giwusa), said the previous amount, R27.58 per hour, is entirely out of touch with the rising cost of living in South Africa. 

“With inflation rates on basic necessities for workers consistently outpacing wage growth in many of these sectors, the purchasing power of the national minimum wage is condemning these workers to a life of permanent poverty,” the union said.

“The current wage structure in SA exacerbates economic inequality, with the gap between the wages of workers and the earnings of corporate executives reaching unsustainable levels.”

The Congress of South African Trade Unions (COSATU) requested a CPI+3% increase in the national minimum wage for 2025.

However, other organisations warned that a higher minimum wage would damage South Africa’s economy and, rather than helping workers, hurt their employment opportunities.

For example, the National Employers’ Association of South Africa (NEASA) said the whole concept of a legislated national minimum wage is simply not feasible or responsible in a developing economy like South Africa. 

“Government interference in the free market leads to artificially created wage scales which are not in tune with the economic realities on the ground,” it said. 

The organisation said it would simply lead to further unemployment, reduction in working hours or simply non-compliance by employers.

“In terms of current legislation, no person, no matter how desperate, may be appointed at a rate less than the NMW, leaving millions of potential employees destitute and reliant on meagre government grants.”