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Increased Earnings Threshold 2021

On 8 February 2021, the Minister of Labour and Employment passed new regulations increasing the earnings threshold from R205 433.30 per annum to R211 596.30.  The new threshold will be effective from 1 March 2021.

In the Regulations, earnings are defined as: the regular annual remuneration before deductions, i.e. PAYE, pension or provident fund, medical aid and similar payments, but excluding employer contributions to these benefits.  The regulations also state that transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration.

The earnings threshold has increased by 3% from R17 119,44 per month (basic salary) to R17 633.03.  This threshold is not to be confused with the maximum benefit threshold for UIF which remains R17 712.00.

Why is the earnings threshold important?

Employees who earn below the threshold are more protected by the labour laws than those that earn more than the threshold.  This threshold forms part of the Basic Conditions of Employment Act, (section 6.3) which states:

6.3    The Minister must, on the advice of the Commission, make a determination that excludes the application of this Chapter or any provision of it to any category of employee earning in excess of an amount stated in that determination.

This comes from the part of the act that deals with the Regulation of Working Time.  It states that the employees earning more that the earnings threshold are excluded from certain rights in terms of this Act.  These are:

Clause 9: Ordinary hours of work

This means that people earing above the threshold can have variable hours whereas those below the threshold should have defined hours of work.

Clause 10. Overtime

Employees earning above the threshold are not entitled to overtime pay or time off in lieu of overtime worked.

Clause 11. Compressed working week

The rules around working a compressed working week are not applicable to employees earning above the threshold (i.e., working a 12-hour day without overtime being paid). Typically, staff working in this manner work 4 days at 12 hours and 3 days off (security industry for example)

Clause 12. Averaging of hours of work

This clause allows overtime worked to be averaged over a three-month period.  Again, these rules do not apply to employee who earn above the threshold.

Clause 14. Meal intervals

Employees earning above the threshold are not entitled to a fixed lunch hour.

Clause 15. Daily and weekly rest period

Employees earning above the threshold are not entitled to the daily rest period or the weekly rest period of 36 hours.

Clause 16. Pay for work on Sundays.

Employees earning above the threshold are not entitled to additional pay (1.5 or double time depending on the nature of the work) when asked to work on a Sunday.

Clause 17(2). Night work

Employees earning above the threshold are not entitled to a shift allowance or transport when working night shift.

Clause 18 (3) Public holidays

Although the act says that employees earning above the threshold are not entitled to additional pay when working on a public holiday, the Public Holiday Act does require pay for all employees who are required to work on a public holiday or time off in lieu.

Labour Relations Act

Amendments to the LRA in 2014 have made reference to the earnings threshold, with specific reference to protections for specific employees.  These are:

  • Temporary Employees employed though a Temporary Employment Service
  • Fixed Term Contract Employees
  • Part Time Employees

Employees in these categories who earn more than the earnings threshold are not protected by the provisions of section 198 of the LRA.  This section of the act is aimed at preventing the abuse of employees who are never given the opportunity to become permanent employees.

In addition to this, the CCMA undertook to assist administratively any employee whose earnings fell below the earnings threshold.  This included:

  • The preparation of dispute documentation
  • The serving of dispute forms to the employer
  • Assistance with collecting awards (the CCMA will pay the sheriff of the court to execute collections)

Over the threshold, employees have to do all of this themselves.

Employment Equity Act

Amendments to the Employment Equity Act also in 2014 makes reference to the earnings threshold in terms of access to the CCMA.  The amendment ruled that the CCMA had jurisdiction to arbitrate sexual harassment matters while other disputes relating to discrimination could be referred to arbitration if the employee earned below the threshold and, unless otherwise agreed, disputes where the employee earns more that the threshold would be referred to the Labour Court.

Access to the Department of Employment and Labour

Perhaps the most problematic provision is that if an employee earns above the threshold the Department of Employment and Labour will not give them access to an inspector if they believe that your employer is not complying with the acts.  The employee would have to use the Labour Court or their own legal representatives to fight for their rights.

Conclusion

Essentially the Earnings threshold is the divide between those employees who have the necessary skills and abilities to negotiate their own working conditions and those who need the full protection to the law to ensure that they are not exploited.

2021 Skills Development Submissions

By submitting your Training Skills Plans to the SETAs, levy paying companies are able to claim up to 20% of the paid Skills Development Levies from SETA for that period as well as an additional Pivotal grant for qualifying companies.

All training reports and training plans are to be submitted to the relevant Seta by the end of April 2021.

Companies who submit training plans and training reports become eligible for additional opportunities which exist for the training and development of both existing employees and the unemployed in order for the employers to gain funding.  These Discretionary grants are in the form of Learnerships, Apprenticeships and approved funding’s as decided by the SETAs in line with their industry strategies.

If you would like Connold and Associates to process your Skills submission to the relevant Seta that you are registered with, please will you contact Tessa Lourens using the form below or by calling 011 452 1707 before 15 March 2021 and we will then assist/ guide you through the submission process.

Contact Form for Tessa Lourens

Minimum Wage Regulations 2021

On 8 February 2021, the Minister of Labour and Employment passed new regulations increasing the minimum wage with effect from 1 March 2021.  As was the case last year, this regulation governs the minimum wages for:

  • All employees who do not fall into specific categories listed below (including casual employees)
  • Farm Workers
  • Domestic Workers
  • Workers employed in Public Works Schemes (cleaning verges Parks, Cemeteries etc.)
  • Learners

The Regulations also provide new minimum wages for

  • Contract Cleaners
  • Employees in the Wholesale and Retail Industries.

The increase in the minimum wage is 4.48% and both the Contract Cleaning and Wholesale and Retail Industries minimum wages have also increased wages by this percentage.  However, there have been substantial increases at the other levels.  See table below:

Minimum Wages 2021

Category of employeeHourly Rate 2020Hourly Rate 2021Increase AmountPercent IncreaseNew Monthly salary (45hrs per week)
Minimum WageR 20.76R 21.69R 0.934.48%R 4 266.30
Farmworkers WageR 18.68R 21.69R 3.0116.11%R 4 226.30
Domestic WorkersR 15.57R 19.09R 3.5222.61%R 3 719.69
Public Work EmployeesR 11.42R 11.93R 0.514.47%R 2 324.56
Contract CleanersR 22.84R 23.87R 1.034.51 %R 4 651.07

Learner Level 1 – 2

Credit amountWeekly RATE 2020WEEKLY RATE 2021INCREASE AMOUNTPERCENT INCREASENEW MONTHLY SALARY
0 -120 CreditsR 312.45R 326.51R 14.064.50%R 1 413.79
121 – 240 CreditsR 624.87R 652.99R 28.124.50% R 2 827.45

Learner Level 3

Credit amountWeekly RATE 2020WEEKLY RATE 2021INCREASE AMOUNTPERCENT INCREASENEW MONTHLY SALARY
0 -120 CreditsR 312.45R 326.51R 14.064.50%R 1 413.79
121 – 240 CreditsR 558.47R 614.95R 56.4810.1%R 2 662.73
341 – 360 CreditsR 963.38R 1003.73R 40.354.19%R 4 346.15

Learner Level 4

Credit amountWeekly RATE 2020WEEKLY RATE 2021INCREASE AMOUNTPERCENT INCREASENEW MONTHLY SALARY
0 -120 CreditsR 312.45R 326.51R 14.064.50%R 1 413.79
121 – 240 CreditsR 624.93R 653.05R 28.124.50%R 2 827.71
341 – 360 CreditsR 963.38R 1006.73R 43.354.50%R 4 359.14
361 – 480 CreditsR 1 405.98R 1 496.25R 90.276.42%R 6 478.76

Learner Level 5 – 8

Credit amountWeekly RATE 2020WEEKLY RATE 2021INCREASE AMOUNTPERCENT INCREASENEW MONTHLY SALARY
0 -120 CreditsR 312.45R 326.51R 14.064.50%R 1 413.79
121 – 240 CreditsR 676.93R 707.39R 30.464.50%R 3 063.00
341 – 360 CreditsR 1 012.83R 1 058.41R 45.584.50%R 4 582.92
361 – 480 CreditsR 1 426.85R 1 491.06R 64.214.50%R 6 456.29
481 – 600 CreditsR 1 822.56R 1 904.58R 82.024.50%R 8 246.83

The intention always was to bring domestic workers and farmworkers up to the national minimum wage within a four-to-five-year period, hence the large increase in the minimum level now. 

It is to be noted that there is no requirement to implement an increase if the employee is already earning more than the minimum salary.

New Occupational Health and Safety Measures

INTRODUCTION

Since the beginning of the Covid-19 lockdown, the Department of Labour has issued directives (Consolidated Directions on Occupational Health and Safety Measures in Certain Workplaces), giving guidance on the measures that companies need to take to ensure that their workplaces are as safe as possible and to prevent the transmission of the virus.

On 1st October 2020, a new Directive was published which requires that all companies with more than 50 employees will have to comply with administrative duties which before were only required by companies with more than 500 employees.

WHAT IS NEW

Companies have previously had to undertake a risk assessment and to develop a workplace plan to implement the safe return of employees to the workplace. This plan must now include a dispute process to manage the process where there are employees who refuse to return to work because of fears of infection.

Companies with over 50 employees must:

  1. Submit a record of their risk assessment together with a written COVID-19 Occupational Health and Safety Policy to the Department of Employment and Labour by no later than the 21st October 2020.
  2. They must also submit the following data to the National Institute for Occupational Health:
    1. To be submitted once
      1. Each employee’s vulnerability status for serious outcomes of a Covid-19 infection.
    2. To be submitted weekly
      1. Details of the daily symptom screening data
      2. Details of employees who test positive for COVID-19
      3. The number of employees identified as high-risk contacts (and who have been quarantined) as a result of exposure to a worker who has tested positive for Covid-19 and
      4. Details on the post-infection outcomes of those testing positive, including the return to work assessment outcome.
  1. Report employees who display symptoms of Covid-19 and are suspected to have contracted the virus in the workplace to the Compensation Commissioner following the guidelines in the directive on Compensation for Workplace acquired Novel Corona Virus Disease.

WHAT TO DO IF A PERSON SHOWS SYMPTOMS OF COVID INFECTION

If an employee shows symptoms at the workplace, the employer must arrange for the worker to be transported to a public health facility for testing.
The employee is required to self-isolate and exposed employees are required to self-quarantine for 10 days (reduced from 14).

EMPLOYEES WHO REFUSE TO WORK

In previous directives there were guidelines of the steps to be taken if an employee refuses to work if circumstances arise which, with reasonable justification, appear to the employee to pose a risk of exposure to Covid-19.
The new directive requires that where the matter cannot be resolved by the safety representative (committee) and the Compliance Officer, the employee must refer it to an inspector within 24 hours and all parties must be informed of the referral.
The inspector is empowered to issue a prohibition notice in terms of section 38 of the Occupational Health and Safety Act if they are of the opinion that the conditions in the workplace threatens the safety of any person.

We were really hoping that the lockdown would be lifted before having to comply with this legislation, but as it has been extended for another month, we will be required to comply. Failure to do so could mean a fine in terms of section 38 of the Occupational Health and Safety Act (currently R50 000-00 or one year in prison). We have developed formats for the reporting requirements and have posted all relevant legislation on our website.

Breaking News: TERS (2020/10/01)

Applications for TERS for the period 16 August 2020 to 15 September 2020 opened this morning. 

The UIF fund seems to have been working hard to try and resolve problems experienced in the months to July 2020 and we are trying to resolve issues that occurred in the payout for the July/September period, however, the call center appears to not be operational at this time.

In an announcement today the following was posted on the DOL Website:

The Unemployment Insurance Fund (UIF), which has so far disbursed R45-billion (R45 244 060 501.31) in 10 212 116 payments through 902 775 employers, will from Thursday, 1 October 2020 start processing Covid-19 TERS applications for the period covering 16 August to 15 September 2020. 

The payments are part of the government wide basket of services to ensure that workers were not exposed to the worst effects of the pandemic – the lockdown that brought the economy to a halt.

Through these cash disbursements via employers, government, through the Ministry of Employment and Labor, has seen to it that many families who would otherwise not have had anything to eat were shielded from falling into the poverty trap.

“To apply for the September period, employers are required to upload similar documentation that include: signed approval or acceptance letter, bank confirmation letter, proof of payment to employees, and refund to the UIF – if applicable”, said the Acting UIF Commissioner Marsha Bronkhorst. 

Applications will undergo a vetting process with external partners to ascertain the validity of claims before the funds are paid and to ensure that the new controls weed out fraudulent claims.

“Early signs of the new vetting process with external partners show that we are on the right track, as we have been able to pick up potentially fraudulent claims. Payments to these claims have been stopped and have been referred to our Risk Management Unit for further investigation.

“We are also subjecting claims applications by foreign nationals to the Department of Home Affairs to ensure that we pay to authentic and deserving beneficiaries, and we shall immediately start paying these claims upon the completion of the vetting process by Home Affairs,” concluded Bronkhorst. 

It is important to note that Covid-19 TERS claim applications for April and May paid closed on 25 September 2020. Claims for June period will close on 15 October 2020 and July/August claims will close on 30 October 2020.

The extension of the payments was announced by the Minister Thulas Nxesi widening the net of the Covid TERS scheme till the end of the National State of Disaster.

We therefore anticipate an extension of the scheme to at least 15 October 2020.

Breaking News: TERS (2020/09/07)

New Directive extends TERS until the end of the COVID 19 Disaster

The Minister of Employment and Labour published a new Directive today extending the TERS benefit.  This extension in the terms of the directive:

shall be in operation for as long as the declaration of the COVID-19, in terms of the National Disaster Management Act, 2002(Act No. 57 of 2002), as a national disaster subsists or is withdrawn by the Minister, whichever comes first.”

This means that there is a further extension until at least 15 September (the date the Disaster Management Act has been extended to.

Having said that, no one to our knowledge has received the July/August TERS yet.

There has also been a clarification in a document called Extension Direction Communication.  The definition of who TERS can be applied for has had the following added to it.

  1. TERS can be applied for when vulnerable employees are unable to return to work, i.e. they have comorbidities or health issues which place them at a higher risk of complication or death should they contract the virus
  2. Employers can apply if:
    • They are not permitted to commence operations either partially or fully by the Regulations
    • They are unable to make arrangements for vulnerable employees to work from home
    • They are unable to fully employ staff because of economic, technological, structural, or similar needs caused by compliance to regulations
    • They are required to limit the number of employees at the workplace through rostering, staggering of working hours, short time or the introduction of shift systems and the temporary reduction in the employee’s ordinary remuneration.

The Directive has been back dated to 15 August 2020.

We are not sure when applications will open, but we have been warned that the DOL is intending to close applications for previous months. 

FOR MORE INFORMATION REGARDING TERS SEE OUR COVID-19 GUIDE ON OUR WEBSITE

Employment Equity Reporting 2020

According to the Employment Equity Amendment Act 2013, a designated employer must submit a report to the Department of Labour once every year.

Please remember that a designated employer is defined as:

  1. an employer who employs 50 or more employees;
  2. an employer who employs fewer than 50 employees, but has a total annual turnover that is equal to or above the applicable annual turnover of a small business as defined in the table below:
Sector or Subsections in Accordance with The Standard Industrial ClassificationTotal Annual Turnover
AgricultureR 6 million
Mining and QuarryingR 22.50 million
ManufacturingR 30 million
Electricity Gas and WaterR 30 million
ConstructionR 15 million
Retail and Motor Trade and Repair ServicesR 45 million
Wholesale Trade, Commercial Agents and Allied ServicesR 75 Million
Catering Accommodation and other TradeR 15 million
Transport, Storage and CommunicationsR 30 million
Finance and Business ServicesR 30 million
Community, Social and Personal ServicesR 15 million

Failure to comply could result in a fine of between R 1 500 000.00 and R 2 700 000.00 or between 2% and 10% of turnover – whichever is greater.

In the event that you would require our assistance in the submission of the required reports and in order for Connold and Associates to accurately determine whether your company is classified as a designated employer, please can we request that you provide Tessa at our offices with:

  • The projected number of employees on your payroll as at 1 August 2020
  • The company’s current annual Turnover
  • Confirmation of Sector company is registered under

Employment Equity inspections – Employment Equity Plans

Employment Equity inspections are in progress by the Department of Labour and are specifically focusing on the implementation and validity of Employment Equity Plans.
 
The act requires companies to include in their Employment Equity plans, a strategy and time frame to implement and rectify under-representation of persons from designated groups.
 
The Department of Labour has indicated that EEA2 reports will not be received as legitimate submissions without proper consultation and communication strategies in place that inform all employees of the EE Act.
Companies that do NOT have Employment Equity plans in place may be fined for contravention of the act: The greater of R 1.500 000 or 2% or the employer’s turnover. In addition, companies that have falsely reported on Employment Equity plans or do NOT have such plans in place will be criminally prosecuted

Please contact Tessa Lourens at our office or using this form if you would like us to assist with the relevant submission of your EE report to the Department of Labour.

Breaking News: TERS (2020/08/12)

The way is cleared for applications for TERS for July and August

The Minister of Employment and Labour published a new Directive today (which has been placed onto the Department of Labour Website) extending the TERS benefit to the 15th August 2020 in terms of section 4 (10) of the Regulations issued in terms of the Disaster Management Act.  There are a few other notable changes to the Scheme:

  1. TERS can be applied for when vulnerable employees are unable to return to work, i.e. they have comorbidities or health issues which place them at a higher risk of complication or death should they contract the virus
  2. Employers can apply if:
    1. They are not permitted to commence operations either partially or fully by the Regulations
    2. They are unable to make arrangements for vulnerable employees to work from home
    3. They are unable to fully employ staff because of economic, technological, structural or similar needs caused by compliance to regulations
    4. They are required to limit the number of employees at the workplace through rostering, staggering of working hours, short time or the introduction of shift systems.

The Directive has been back dated to 27 June 2020 and remains in operation to 15 August 2020.

We expect the website to open for applications this week.

DISCREPANCY TAB

A new functionality has been added to the system which allows for employers to correct information for an employee that they consider has been incorrectly paid through the TERS.  Called the Discrepancy Tab it will allow for that employee to be reassessed.

THE EFFECT OF TERS

In a media briefing published on 3 August 2020, it was announced that to date the fund has paid out R37 Billion (R37 133 662 558.77) for 693 561 applications benefits 8.3 million (3 298 307) employees.  This is within the budgeted R40 Billion announced in April.

The Commissioner said “it is quite clear that these disbursements have made a real difference to millions of people dependent on the workers who received these cash injections.  As the Fund, it is an honour of us to have played this part and will do so until August 15, armed with learnings from the past three months”

FOR MORE INFORMATION REGARDING TERS SEE OUR COVID-19 GUIDE ON OUR WEBSITE