On 1 July 2014, the Minister of Labour increased the earnings threshold prescribed by the Basic Conditions of Employment Act, 1997 ("BCEA").

The threshold has increased from R193 805.00 per annum to R205 433.30 per annum.  For ease of reference, this equates to R17 119.44 per month. This means that employees who earn less than R205 433.30 per annum are entitled to benefit from the following rights provided for by the BCEA:

• section 9 (limiting ordinary hours of work to 45 hours per week);
• section 10 (payment for any overtime worked in excess of 45 hours);
• section 11 (compressed working week);
• section 12 (averaging hours of work);
• section 14 (meal intervals);
• section 15 ( mandatory daily and weekly rest periods);
• section 16 ( increased pay for working on Sundays);
• section 17 (2) (night work); and
• section 18 (3) ( increased pay for working on Public Holidays).

Employers must take note of the manner in which "earnings" are calculated in that this will determine which employees are in fact entitled to benefit from those sections of the BCEA as listed above. "Earnings" means an employee's regular annual remuneration before deductions.  Payment for overtime worked, subsistence allowances, transport allowances and achievement awards are excluded from the "earnings" calculation.Employers are well advised to carefully assess whether employees who did not previously fall within the earnings threshold are now, because of the increase, entitled to the protection afforded by the BCEA.    For example, an employee who earned R200 000.00 per annum up until 1 July 2014 would not have been entitled to be remunerated for overtime hours worked.  However, because the earnings threshold has now increased to R205 433.30 per annum, that employee will now become entitled to be remunerated for overtime hours worked.   

The BCEA earnings threshold will also have a significant impact on the pending labour law amendments in that the obligation to comply with several of the amendments will be determined by whether an employee earns less than the BCEA earnings threshold.

Clients are welcome to contact Shepstone & Wylie's employment law department to discuss the increase of the earnings threshold in further detail.

SIOBHAN LEYDEN,

Contact: 011-290 2557 or sleyden@wylie.co.za