Workers earning less than R172?000 a year can claim from July 1

2011-06-23 00:00

EMPLOYEES are often unaware that they are entitled to certain rights provided for in the Basic Conditions of Employment Act, 1997 (BCEA) by virtue of how much they earn.

Employees earning below an amount determined by the Minister of Labour are legally entitled to be remunerated for overtime worked, work on public holidays and work on Sundays. In other words, employees who earn more than the amount set by the Minister of Labour will not benefit from these provisions and are not entitled to be remunerated therefore.

At present the earning threshold is R149 736 per annum. However, the Minister of Labour recently increased this threshold.

Effective from July 1, 2011, the earning threshold will be R172 000 per annum. This means that from that date employers must ensure that all of their employees earning less than R172 000 per annum are being paid in accordance with the BCEA in so far as overtime work for Sundays and public holidays is concerned.

The definition of “earnings” is important in determining whether an employee falls within the minimum earnings threshold.

“Earnings” means an employee’s regular annual remuneration before deductions.

It excludes contributions made by the employer in respect of the employee. In instances where an employee receives subsistence and travel allowances, achievement awards and payment for overtime worked, this will not be regarded as remuneration for the purposes of calculating the threshold.

Employers are well advised to review their contracts of employment and payrolls before July 1 in order to ensure that those employees who are legally entitled to certain provisions of the BCEA are being paid properly.

In particular, attention should be given to those employees who did not previously enjoy certain benefits because they earned more than R149 736 per annum may now be entitled to these rights because they earn within the new threshold.

 

*Siobhan Viljoen is an associate partner, employment law department, Shepstone & Wylie Attorneys.

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