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Find out right here what to do if you can't afford minimum wages

by , 08 January 2016
Minimum wages are legislated through either sectoral determinations or bargaining council agreements.

These minimum wages are considered legally binding and failure to meet them could hold you liable for back-pay or even prosecution.

But what if you just can't afford to pay the minimum wages? Read on to find out...

If you truly can't afford to pay minimum wages, then you must apply for an exemption from your bargaining council.

Read on to find out how to go about it and what to include in it…

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So, if for example, you're a new, small and struggling business, then you can apply for an exemption from minimum-wage requirements. But bargaining councils are very reluctant to grant exemption, which is why you'll be required to justify your application with concrete proof.

Evidence you can use to justify your application for an exemption for minimum wages includes:

1.      Audited financial statements and other documents as evidence;
2.      Supporting statements from your workforce;
For example, under the Metal and Engineering Industries Bargaining Council, the regulations are:

·        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 as to why you require an exemption from minimum wages;
·        You must attach proof of your claims to your application. This can include, as was mentioned earlier, audited financial statements as well as your business plan;
·        A full motivation which clearly explains the difficulties you're experiencing and the need for the application; and
·        You should try to get a signed agreement, by your employees' representatives, on your business's needs.
IMPORTANT NOTE: It is strongly advised that you stick to the minimum wage requirements AT ALL TIMES until you get your exemption. And you should keep records to prove this.

*Would you like to see a very useful SAMPLE APPLICATION LETTER FOR EXEMPTION FROM MINIMUM WAGE REQUIREMENTS? Then subscribe to Labour Law for Managers today.

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