What is the meaning of “earnings”?
For these purposes, “earnings” is the employee’s regular annual renumeration before deductions (such as income tax and pension payments), excluding any employer contributions, allowances, overtime payments, and similar payments.
Which provisions do not apply to employees earning more than the threshold?
The following provisions will not apply to employees who earn more than 254,371.67 ZAR per annum:
- Certain entitlements and protections afforded to employees under the BCEA, including in relation to ordinary hours of work, overtime pay, meal intervals, daily and weekly rest periods, Sunday pay, night work pay, and pay for work on public holidays (which are not ordinary working day(s)).
- Sections 198A and 198B of the LRA which will mean (respectively):
- employees working for a temporary employment service and earning above the threshold do not risk being deemed employees of the end client; and
- employees on fixed-term contracts and earning above the threshold will not risk being deemed to be indefinitely employed by the employer.
- The ability for employees to refer disputes concerning alleged amounts owing or unfair discrimination to the Commission for Conciliation, Mediation, and Arbitration (CCMA) for arbitration.
- Section 200A of the LRA which provides for a presumption of employment where any factor listed in that section is present in the provision of services by one person to another. These factors include a person’s work being subject to the control of another person, a person being economically dependent on another person, a person’s hours of work being prescribed by another person, and various other indicators of employment.
The consequence is that any employees who are earning between 241,110.59 ZAR and 254,371.67 ZAR (and were previously excluded from benefiting from these provisions), are now in scope and entitled to the above protections.
So, what should employers do now?
Employers should conduct an audit on their workplace to determine whether any employees will be impacted by the increase in earnings threshold to ensure compliance with the above-mentioned statutes. If you need any support with this, or would like any further information, please get in touch with a member of the MDR ONE team.
