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Can't pay minimum wages? Here's how to apply for an exemption

by , 21 January 2014
As you know, minimum wages apply to every industry. But, did you know you can apply for an exemption if you can't pay them? Read on to find out more about this and how to apply...

Paying the wrong minimum wage could cost your company thousands.

But, what if you're a small, struggling business that's just started and you can't pay the minimum wage?

If you can't pay the minimum rates you must apply for an exemption from your bargaining council

Bargaining councils are very reluctant to grant exemptions. So you'll have to justify your application with solid proof. This must include:

  • Audited financial statements and other documents as evidence; and
  • Supporting statements from your workforce.

For example, under the Metal and Engineering Industries Bargaining Council the exemption regulations are as follows:

You must consult with your staff and trade union before applying;
You must apply to the council in writing;
You must provide a clear explanation for your need for an exemption;
You must attach proof of your claims to your application; and
You must try to get from your employees' representatives a signed agreement on your exemption needs.

Caution: 'You must stick to the minimum requirements at all times until your exemption is granted. And remember to keep all records to prove this,' says the Labour Law for Managers Loose Leaf Service.

You can keep up to date with wage increases by checking FSP business and regularly checking with the Department of Labour to see if your business falls under the scope a sectoral determination or bargaining council.

Don't forget that new industries and sectors come under the scope of sectoral determinations and bargaining councils from time to time and update the minimum rates regularly.

Knowing what to do if you can't pay minimum wages will help ensure you comply with the law.

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