The national minimum wage looks set to increase by inflation plus one percentage point this year, with minimum pay for domestic workers matching other workers for the first time.
According to a notice by the Department of Employment and Labour, a majority of the National Minimum Wage Commission’s commissioners recommended that the national minimum wage should be increased by one percentage point above inflation. A minority wanted the minimum wage to increase by 1.5 percentage points above inflation.
The latest consumer price index (CPI) rate is 5.5%, which means that – at current rates – a hike of one percentage point (to 6.5%) will increase the minimum wage to R23.10.
Last year, the minimum wage was hiked by 4.5% to R21.69 per hour.
All the commissioners agreed that from this year, domestic workers will earn the same national minimum wage as other workers.
Currently, the minimum wage for domestic workers – at R19.09 per hour – is 12% lower than the minimum wage for other workers.
This means that this year, their minimum wage could be hiked by more than 20%, from R19.09 to R23.10 (at current inflation levels). The domestic worker minimum wage was hiked by 23% in 2021 to move it closer to the national minimum wage.
The Department of Employment and Labour said the commission will now begin taking inputs and recommendations on minimum wage adjustments.
The process, which is part of the annual review of the National Minimum Wage in terms of section 6(2) of the National Minimum Wage Act, was introduced in January of 2019, when the National Minimum Wage was set at R20 per hour or R3 500 monthly.
After the public comment process, Minister of Labour and Employment Thulas Nxesi will make a determination on the National Minimum Wage and which sectors it will cover.
The notice said the National Minimum Wage Act said a decision must prioritise a more equitable pay structure to ensure that workers do not live in poverty.
“This decision implies that costs for some employers will increase, although broader benefits to society for more equitable workplaces and remuneration systems may offset this. The act provides for exemptions for employers who truly cannot afford the adjustment,” said the notice.
The notice said the commissioners considered the state of the economy in light of the ongoing Covid-19 and proposed national minimum wage increases by the rate of inflation plus percentage point.
“In 2021, the national minimum wage national minimum wage again increased by 1.5% above headline inflation, to R21.69. This translated to an increase of 4,5% in the national minimum wage. The process of raising the minimum wage for farm and domestic workers also led to an increase of 16.1% in the minimum for farmworkers and 22.6% for domestic workers,” the notice said.
Since last year, farmworkers earn the same national wage as other workers.