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Do you understand the legal implications of the earnings threshold for your company?

by , 05 June 2013
In July last year, the earnings threshold in the Basic Conditions of Employment Act (BCEA), increased from R172 000 to R183 008 per year. What does this mean for your company? Well, this means there are implications that come with this new earnings threshold. Read on to discover what these implications are so you can be compliant.

According to the Practical Guide to Human Resources Management, earnings refer to your employee's annual remuneration before deductions. Earnings exclude employer contributions made for your employee, like UIF.

It's crucial your company is in line with the increased earnings threshold that's increased from R172 000 to R183 008 per year. You can only do this by understanding the implications of the earnings threshold.

Four implications of the earnings threshold

  1. Ordinary hours of work: In terms of the BCEA, you can ask employees who earn above the earnings threshold to work longer than the standard working hours without remuneration. Keep in mind that the maximum normal working time allowed is 45 hours a week. This means nine hours per day (excluding lunch break) if your employee works a five-day week, and eight hours per day (excluding lunch break) if your employee works more than five days per week.
  2. Meal intervals: An employee who earns above the threshold isn't entitled to a fixed lunch hour or tea time and may be required to work during those periods or take a meal interval at a time which is suitable later in the day.
  3. Daily and weekly rest period: According to the BCEA, you must allow your employee a daily rest period of at least 12 consecutive hours between ending and recommencing work. In addition, you must also grant your employee a weekly rest period of at least 36 consecutive hours, which should include a Sunday. For employees earning above the threshold, this ruling doesn't apply.
  4. Night work: The earnings threshold excludes employees who earn above the threshold from being compensated by a night shift allowance or being provided with transport home after their shift. On the other hand, employees who earn below the threshold must be compensated extra for work done after 18:00 at night.

Understanding the legal implications of the earnings threshold will help ensure you're compliant.

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