Category: Update Blast | 4.4% increase INCREASE MINIMUM WAGE March 1 R28.79 per hour 2025
IMPACT OF SOUTH AFRICA’S NEW MINIMUM WAGE INCREASE ON BUSINESSES AND WORKERS
The South African government has announced an increase in the national minimum wage, set to take effect from March 1, 2025. The revised wage has been adjusted to R28.79 per hour, reflecting a 4.4% increase from the previous rate of R27.58 per hour.
HOW DOES THIS IMPACT MY BUSINESS?
The wage increase is expected to have significant implications for businesses across multiple industries. While labour federations argue that the increase is insufficient, many small and medium enterprises (SMEs) see it as a challenge to financial sustainability. Employers now face the task of reassessing their operational costs and payroll budgets to comply with the new regulations.
IS MY BUSINESS EXEMPT?
Not all industries will be subject to the new minimum wage rate. Certain sectors operate under their own bargaining councils or sectoral determinations, which set specific wages for workers. Notably, Expanded Public Works Programme (EPWP) and learnerships are often exempt from these adjustments.
BE AWARE, DO COMPLY, LEGAL CONSEQUENCES FOR NON-COMPLIANCE
The Department of Employment and Labour has conducted blitz inspections in industries such as hospitality to enforce labour laws and may come knocking at your door at any time. However, many workers – particularly in informal sectors like domestic work and gardening – remain vulnerable to non-compliance.
Employers who fail to adhere to the new minimum wage face serious legal consequences. Employees can lodge complaints with the Commission for Conciliation, Mediation, and Arbitration (CCMA), which may result in adverse arbitration awards. Employers may be required to provide back pay, which could become financially burdensome. Additionally, non-compliant businesses risk being fined by regulatory authorities.
CONCLUSION
While the national minimum wage increase is intended to uplift low-income workers, its implementation presents challenges for businesses – particularly SMEs. Employers must proactively review their wage structures, ensure compliance, and maintain transparent communication with employees to mitigate potential labour disputes. The government’s commitment to fair wages and economic equality must be matched by effective enforcement and business preparedness to balance economic sustainability with worker welfare.
DISCLAIMER
Nothing in this article and/or post should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure accuracy, Tax A Sured (Pty) Ltd does not accept any responsibility for consequences of decisions taken based on this article and/or post. It remains your own responsibility to consult the relevant primary resources when taking a decision.
