The Department of Employment and Labour’s National Minimum Wage Commission is recommending an above-inflation hike to the NMW for 2024, which could see the rate for domestic workers jump to as much as R27.71 an hour.

The commission announced in December 2023 that it was investigating three proposals for the NMW increase for 2024, including:

  • The majority recommendation for the NWM to increase by Consumer Price Index (CPI) plus 3%.
  • The recommendation by the Business Constituency is only CPI; and
  • The recommendation by an independent expert is CPI plus 0.75%.

Eight of the 12 commissioners proposed that the national minimum wage increase by CPI 3%.

The CPI is a measure of the change in prices as paid by consumers for goods and services over time. For 2023, CPI averaged around 6%, and CPI for 2024 is projected to be 4.5%, according to economists.

In 2021, the Commission recommended increasing the national minimum wage from R20.76 to R21.69 per hour. The 2022 national minimum wage was revised from R21.69 to R23.19 per hour. In 2023, the minimum wage was adjusted to R25.42 per hour.

If the Commission follows its recommendation, the minimum wage would increase by another 9% in 2024 – meaning the wage could be revised to R27.71 per hour in 2024.

If the lowest proposed hike is chosen (just CPI), the wage will still increase to R26.95 per hour.

A minimum wage is the lowest remuneration employers can legally pay their employees for each ordinary hour worked. It is illegal for an employer to pay employees less than this minimum floor.

The Department of Labour has set the minimum wage for full-time domestic workers at 100% of the NMW.

Anyone employing someone for more than 24 hours a month is considered full-time.

If your domestic worker works 8 hours a day, 5 days a week, they should be paid at least R4,433.60 a month – this up from R4,067.20 a month in 2023.

The Employment and Labour Minister will announce in February 2024 the new rate of adjustment, which will come into operation from 1 March 2024.

Good news or bad news?

While a pay hike for domestic workers is undoubtedly great news for those who can find full-time employment, the reality for households in South Africa is much harsher.

South African households have suffered great financial pressure over the last few years amid high levels of inflation, restrictive interest rates, and many socioeconomic ills brought on by the Covid-19 pandemic and load shedding.

As a result, many middle-class households can no longer afford to employ domestic workers. This has been reflected in the loss of thousands of domestic worker jobs since 2020.

The latest employment data from Stats SA shows that there was a slight improvement in the number of domestic workers employed in the South Africa at the end of September 2023, with households and businesses employing 860,000 workers, up by 16,000 from 844,000 in the second quarter of the year.

However, despite the increase in jobs, the figure is still 150,000 short of the over 1 million domestic workers who were employed before Covid-19.

Industry reports pointed to around 250,000 domestic workers losing their jobs during Covid. As of the third quarter of the year, only 100,000 of those jobs have been recovered.

Analysts have also argued that the national minimum wage has largely failed domestic workers in the country, with Sweepsouth’s sixth annual domestic worker survey for 2023 showing that domestic workers in the country still earn, on average, much lower than the National Minimum Wage, with female domestic workers at R2,989 per month.

Source: www.businesstech.co.za