For the fifth consecutive year, the Department of Employment and Labour has elected to increase the earnings threshold from R254 371.67 per annum to R261 748.45 per annum, with effect from today, 1st April 2025.
Designed to safeguard lower-earning employees from exploitative labour practices, the earnings threshold, which is adjusted in terms of section 6(3) of the Basic Conditions of Employment Act (‘the BCEA’), is critical to the application of labour legislation.
Crucially, the practical effect of the increase is that employees who fall within the revised threshold will enjoy the benefit of the protective provisions contained under Chapter 2 of the BCEA. These provisions regulate, inter alia, employees’ working hours, including meal intervals, payment for work performed on Sundays and public holidays, and daily rest periods. Conversely, employees who earn above the determined amount are excluded from the protections contained under sections 9-16, 17(2), and 18(3).
To ascertain whether an employee falls above or below the threshold, ‘earnings’ is defined as an employee’s ‘regular annual remuneration before deductions’ for income tax, pension contributions, medical aid, and other similar payments, but excludes similar contributions made by employers, ‘subsistence and transport allowances received, achievement awards, and payments for overtime worked’.
Whether an increase to the earnings threshold results in expanded protections for employees depends on various factors, including the extent of an employee’s annual increase and an employer’s remuneration review cycle. As the increase may have pecuniary consequences for employers, it is recommended that employers carefully evaluate their existing remuneration structures to account for the threshold adjustment and any ancillary costs.
Similarly, employers with non-typical employment arrangements in place, such as utilising the employees of temporary employment services, should also review these arrangements to secure compliance with the BCEA and avoid the applicability of deeming provisions under the Labour Relations Act.
In light of the growing body of employment law requirements, it is essential for business owners to comply with all aspects of the prevailing legal framework to avoid workplace disputes, unwanted legal action, and reputational damage.
With this in mind, STBB’s specialists have the experience and expertise to advise on an extensive catalogue of employment-related matters. For comprehensive legal advice, contact us at labour@stbb.co.za.
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