Gerhard Papenfus, CEO of the National Employers’ Association of SA (Neasa), which represents 1,800 businesses employing 65,000 workers in the engineering sector, says the government’s national minimum wage policy is “not responsible” in a developing economy such as SA.
Employment & labour minister Nomakhosazana Meth has increased the minimum wage to R28.79 per hour, effective from March 1, an increase of 4.4% from the 2024 rate of R27.58 per hour. Consumer price inflation is forecast to average 4.5% in 2025.
The debate over the minimum wage and tight labour legislation has often been cited as some of the key factors stifling investment and job creation in SA.
Meth said the government was committed to the implementation of “social protection initiatives” and wage increases. She said the minimum wage ensured that workers receive their dues and were not exploited for the services they rendered.
The government introduced the minimum wage in January 2019 to ensure fair pay for the country’s lowest-paid workers, limit exploitation and promote social justice.
This has not gone down well with Neasa.
“Government interference in the free market leads to artificially created wage scales which are not in tune with the economic realities on the ground, and will simply lead to further unemployment, reduction in working hours or simply noncompliance by employers,” Papenfus said.
In terms of the legislation, “no person, no matter how desperate, may be appointed at a rate less than the minimum wage, leaving millions of potential employees destitute and reliant on meagre government grants”.
“Employees should simply be paid according to their skills, and that the free market should be allowed to compete for the best and most valuable employees, which in turn will force wages up and compel employees to upskill themselves,” he said.
He said the government should do away with “centric policies” and allow the free functioning of the market. This, he said, led to economic growth and increased employment opportunities.
“SA is in dire need of economic stimulation. The best method to achieve this is by fostering policies conducive to economic and business growth, by implementing laws, which encourage employment, allowing citizens to work, earn a living and become productive members of society.”
Employment law specialist advocate Sunette Brink said: “Employers who fail to pay the minimum wage may face compliance orders and arbitration claims from employees, and fines and legal penalties.”
She said some employers may qualify for an exemption under the minimum wage legislation, but “full exemptions are not granted. To qualify, employers must prove financial hardship and provide consultation records with workers or unions.”
Approved exemptions last for a maximum of 12 months.
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