BCEA earnings threshold and national minimum wage increase

On 6 March 2025, the Department of Employment and Labour published the new earnings threshold (Threshold) in terms of the Basic Conditions of Employment Act, 1997 (BCEA). The Threshold has been increased from ZAR254,371.67 per annum (which amounts to ZAR21,197.64 per month) to ZAR261,748.45 per annum (which amounts to ZAR21,812.37 per month) with effect from 1 April 2025.

Employees earning above this Threshold are excluded from various sections of the BCEA, namely sections 9 (Ordinary hours of work); 10 (Overtime); 11 (Compressed working week); 12 (Averaging of hours of work); 13 (Determination of hours of work by Minister); 14 (Meal intervals); 15 (Daily and weekly rest period); 16 (Pay for work on Sundays); 17 (Night work – 17(2) that deals with transport and night shift allowances); and 18 (Public holidays – 18(3) that deals with payment for work on a public holiday that falls on a day on which the employee would ordinarily not have worked).

Employees earning above the Threshold are not entitled to additional remuneration in respect of overtime as they may be required to work any reasonable hours for the performance of their duties without additional compensation.

This increase in the Threshold would, however, have important implications for employees who earn below the Threshold. If an employee was not receiving overtime pay because that employee earned just above the Threshold, that employee may now need to receive additional remuneration in respect of overtime worked from 1 April 2025 if such employee earns less than the new Threshold.

Furthermore, the Threshold amount is linked to other legislation as well, for example:

• The deeming provisions in the Labour Relations Act, 1995 (LRA). In this regard, a fixed term employee who earns below the Threshold and is engaged for longer than three months is deemed to be a permanent employee unless there is a justifiable reason for fixing the term. Similarly, labour broker employees who earn below the Threshold and are engaged to work for a client for longer than three months are deemed to be employees of the client for purposes of the LRA. Therefore, employers should also consider whether the increase in the Threshold amount will result in the deeming provisions in the LRA applying to certain of their employees;
• In terms of the Employment Equity Act, 1998, unfair discrimination claims must first be referred to the Commission for Conciliation, Mediation, and Arbitration (CCMA) for conciliation. If the dispute remains unresolved, employees who earn below the Threshold can refer the dispute to the CCMA for arbitration. However, employees who earn above the Threshold must refer their claim to the Labour Court (unless otherwise agreed by the employer); and
• In terms of Section 73A of the BCEA, disputes regarding unpaid amounts due to employees must first be referred to the CCMA for conciliation. If unresolved, employees earning below the Threshold can proceed to arbitration at the CCMA, while those earning above the Threshold must refer their claims to the Labour Court regardless of an employer's consent to the jurisdiction of the CCMA.

In addition to the increase to the Threshold, the Department of Employment and Labour has also released the new National Minimum Wage, which with effect from 1 March 2025 increased from ZAR27.58 per hour to ZAR28.79 per hour for all employees across all sectors (including farm workers and domestic workers), except workers employed on expanded public works who are entitled to ZAR15.83 per hour and workers under learnership agreements.