Pay the correct wage

‘No sympathy for wage non-compliance’ The Witness 10 Jan 2019

“NOT to pay the correct wage is a high-risk exercise.”

This is according to Rob Cooper, chairperson of the Payroll Authors Group of South Africa, a body that represents the payroll industry with statutory bodies.

“There is not a South African business or payroll which is unaffected by the national minimum wage which came into effect on January 1. If not applied, the National Minimum Wage Act provides stiff fines for non-compliance.”

The current minimum wage rate of R20 per hour — R18 for farmworkers and R15 for domestic workers — was put into the public domain almost two years ago. There is provision for “hardship” exemptions for employers if they can prove that they can’t afford it.

“However, the bottom line is that there will be no sympathy for non-compliance with the national minimum wage from the Commission for Conciliation, Mediation and Arbitration (CCMA),” said Cooper.

He said the national minimum wage has been extensively publicised and discussed, particularly within the trade unions. “Their members are well-aware of the national minimum wage introduction and will be at the CCMA in no time if they find that they are not being paid the correct wage. The fines can be retrospectively applied. An employer can thus be caught 12 months down the line with fines retrospective to the starting point of the non-compliance.”

“… There are a few challenges that must be specially catered for. For example, the national minimum wage applies to a new concept of ‘workers’ as opposed to ‘employees’ as was envisaged in the 2017 draft legislation.

“Up to now, employers and payroll systems have had to cater for two individual employment statuses — employees which are fairly straightforward, and independent contractors with plenty of grey areas and uncertainties across all the employment-related acts. The new concept of workers falls somewhere between employees and independent contractors, and it is going to be confusing, difficult to understand and problematic to apply.”

Cooper said another important aspect is the correct understanding and application of the concept of “wage”.

“Most large employers have a fairly good understanding of what wage is. However, there are many medium and small employers who believe that, for example, the value of the provision of housing and/or meals can be added to the value of the actual wage. This incorrect thinking makes them believe they are paying above the national minimum wage rate and they are therefore at risk.”