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The new annual earnings threshold was announced last week. What does this mean for you?

by , 09 July 2013
Last week, the Department of Labour announced the new annual earnings threshold, effective from 1st of July. The amount increased from R183 008 per annum to R193 805 per annum. But what does this mean for your business?

Keep reading to find out what effect these changes have...


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What implications the earnings threshold change has on you
As an example, let's have closer look at how the new earnings threshold changed overtime.
In terms of overtime, if an employee earns less than the threshold you'd have to pay him for working overtime.
But if an employee earns more than the new threshold you're allowed to ask him to put in longer working hours without remuneration. But you must remember employees can't work more than 45 normal working hours a week.
So basically the new threshold means you're probably going to have to pay more in overtime!
For example: Let's say Sally earns R190 000 per annum as your admin clerk. Once a month she works an extra 3 hours on a Sunday to help the accounts division with their monthly filing.  You now have to pay her double time for the additional hours, where you didn't have to before the annual earnings threshold increased.
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Seven sections of the BCEA are affected by the new annual earnings threshold
Just remember: In line with notice 456 in the Government Gazette 36620 of 1 July 2013, employees earning more than the annual threshold are excluded from sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) of the BCEA.
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
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Until next time,

Taryn Strugnell
FSP Business
P.S. Do you have a pressing labour or HR question you need answered? Simply sign up to www.labourandhrclub.co.za and get it answered today!

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