COSATU statement on the 2021 increases to the National Minimum Wage and the national income threshold
10 February 2021
The Congress of South African Trade Unions notes the announcement by Minister for Employment and Labour, Thulas Nxesi, of adjustments to the National Minimum Wage (NMW). These increases will come into effect from 1st March 2021 and they are based upon the recommendations of the NMW Commission. They read as follows:
- The National Minimum Wage will increase by 4.5% (inflation of 3% plus 1.5%) to R21.69 per hour.
- Farmworkers will be increased from 90% to 100% of the National Minimum Wage.
- Domestic workers will be increased from 75% to 88% of the National Minimum Wage. In other words, they will receive R19.09 per hour.
The Federation welcomes the recommendation that domestic workers will equalise the NMW in 2022. These increases will mean extra money in the pockets of the most oppressed and destitute workers. This will enhance their spending power and help them cope with the rising cost of living, and in the process contributing to economic stimulation.
We find it disappointing that the Commission and government have failed to narrow the gap between for workers who are employed under the Expanded Public and Community Works Programme. They remain unfairly pegged at 55% of the NMW.
The government has no moral legitimacy to demand private sector employers to abide by the country’s laws while it continues to disregard them and pleads poverty. The government’s gross mismanagement of the public resources cannot be continually used as a defence.
The Federation is pleased that despite some prophets of doom complaining about the introduction of a NMW, there is no credible scientific evidence that it has led to job losses.
We also note the increase in the Basic Conditions of Employment Act national income threshold from R204 433 to R211 596.30 per annum. This is a straight inflationary adjustment that does not address government and the Commission’s failure to adjust this critical threshold for seven (7) years since 2014.
This threshold is important because Unemployment Insurance guaranteed paid overtime, limitation on temporary work and many other labour rights, protections and benefits are pegged on it. The failure to increase it since 2014 has led to the effective erosion of these important legal rights, benefits, and protections.
The National Minimum Wage Commission needs to review this income threshold and propose an appropriate level that will ensure workers are protected and given the rights and benefits that they are legally entitled to.
In future, this threshold needs to be adjusted automatically each year to protect these rights from inflationary erosion.
Issued by Sizwe Pamla, National Spokesperson, COSATU, 10 February 2021