Agri SA says it is alarmed by the announcement of a 9,6% increase in the national minimum wage, which will be implemented next month.

Published in the Government Gazette yesterday, the national minimum wage will increase to R25,42 per hour with effect from 1 March 2023.

This new wage of R25,42 also applies to farmworkers and domestic workers, with only a few exceptions.

Agri SA says this increase in costs will further strain already hard-pressed farmers, who are already battling to contain costs associated with load shedding, crumbling infrastructure and high input costs.

The Chair of Agri SA’s Centre of Excellence: Labour, Johan Wege says this increase will also further undermine food security and put much-needed jobs on the line.

He says the increase continues a trend of above-inflation increases for more than a decade.

Whereas farmers were previously in a position to absorb these increases thanks to the sustained growth in a number of agricultural industries, that period is now over. The sector faces extreme headwinds, which on their own threaten food security in the coming years.

 

Agri SA made a submission proposing a CPI minus 2% increase in the national minimum wage. Wege says this proposal recognised the financial pressure on workers in this inflationary environment, but also addressed the reality of farmers’ inability to continue to absorb above-inflation increases.

That government has ignored this balanced position, is a devastating blow not only for the sector but also for the consumers who will eventually see this increase reflected in their food expenditure.

National Minimum Wage exceptions:

• Workers employed on Expanded Public Works: R13,97 per hour
• Workers with learnership agreements in terms of the Skills Development Act

Wage increases in other sectors:

• Employers in SD9: Wholesale and Retail Sector will have to increase their minimum rates (which depends on the job category, the lowest of which is in line with the national NMW at R25,42 per hour).
• Employers in the SD1: Contract Cleaning Sector will also have to increase their minimum rates to a R27,97 minimum in metropolitan areas and R25,50 in certain rural areas).
• More details can be found in the Government Gazette (GG) – click here.

Benefits NOT included:

• The way employers can structure a remuneration package is restricted.
• The NMW excludes allowances that are paid to enable employees to work (such as transport and equipment), or payment in kind (such as board or accommodation), as well as bonuses, tips or food (e.g. one cannot argue that you pay an employee less than the minimum wage because you contribute to their uniform or provide them with meals).

There is provision for employers to apply for exemption. The National Minimum Wage Exemption System is accessible online at https://nmw.labour.gov.za.

Alternatively, employers may approach their nearest branch of the Department of Employment and Labour.