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Attention business owners: The annual earnings threshold has increased!

by , 04 July 2014
Labour Minister, Mildred Oliphant has increased the annual earnings threshold.

And it officially came into effect earlier this week.

So what does this all mean for you as an employer?

Continue reading to find out so you can comply with the Basic Conditions of Employment Act (BCEA).

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Here's what you need to know about the new annual earnings threshold

On Wednesday, the Labour Minister increased the annual earnings threshold from R193 805 per annum to R205 433.30.

According to Gavin Stansfield, director of employment at Cliffe Dekker Hofmeyr, this change is significant as employees who earn above the threshold (now R17 119.41 gross per month) are excluded from the protection offered by the BCEA in terms of sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3).

These sections refer to:
 

  • Ordinary hours of work
  • Overtime
  • Compressed working week
  • Averaging of hours at work
  • Meal intervals
  • Daily and weekly rest periods
  • Compensation for work on Sundays, at night or on public holidays

And you need to take the new annual earnings threshold seriously. Because as Stansfield explains, the increase in the threshold has increased the number of employees who are entitled to the above-mentioned minimum rights.

So while an employee who previously earned R195 000 wouldn't have been entitled to overtime pay, now thanks to the adjustment in the annual earnings threshold, they are.

This is true for all employees who currently earn between R193 000 and R205 433.30.

Now that you know the new minimum earnings threshold, comply with the Basic Conditions of Employment Act.

PS: Lookout for more articles on this topic as the experts behind the Labour Law for Managers Loose Leaf Service continue to break down what the new annual earnings threshold means for you.

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