National minimum wage increase

19 February 2020

Agri SA takes note of the increase of 3.8% to the national minimum wage which will come into effect on 1 March 2020. The increase is exactly in line with the recommendation made to the Minister of Employment and Labour by the National Minimum Wage Commission.

The commission had a very difficult task to act per its mandate which is found in the National Minimum Wage Act. This includes making recommendations to the minister that will consider both the country’s unemployment rate as well as maintaining a balance to ensure that the value of the national minimum wage won’t be compromised. The average CPI for 2019 was 4.1%.

It is a relief for the agricultural sector that the 90% special dispensation is still in place. This dispensation will be under discussion in 2020 to establish what will happen to it in 2021. The agricultural sector is dependent on the special dispensation due to the sector’s vulnerability of which the continuing drought is one of the biggest contributors.

However, rising unemployment is the biggest driver of poverty. The impact of the minimum wage in this regard must be continuously monitored and evaluated. South Africa cannot afford further job losses. Understanding the circumstances in which farmers find themselves is therefore crucial. Jobs can be protected by granting permission to farmers who cannot afford the minimum wage at this stage.

Employers who are unable to afford the national minimum wage can apply for exemption at https://nmw.labour.gov.za/.

Issued by Thea Liebenberg, Media Liasion Officer, Agri SA, 19 February 2020