The gazetted new earnings threshold which takes effect from 1 March 2022 will be R224,080.48 per year (approximately R18,673 per month). Previously, the earnings threshold was R211,596.30 per year (approximately R17,633 per month).
“Earnings” is defined as the employee’s regular annual remuneration before deductions, excluding benefits such as subsistence and transport allowances, achievement awards, and payments for overtime worked.
The earnings threshold has a substantial impact on the application of various provisions in the BCEA which includes, amongst other things the following:
- Employees earning under the new earnings threshold enjoy the full protection of the BCEA including the provisions that regulate ordinary hours of work, overtime, compressed working weeks, averaging of hours of work, meal intervals, Sunday pay, pay for night work, and pay for work on public holidays.
- Employees earning above the threshold are precluded from these automatic protections. These issues are still relevant to higher earners but are typically handled in contract negotiations with respective employers at the time of employment.
- Employees that earn below the new threshold are now included in the protections set out in section 198B of the LRA which applies to fixed-term employees who may be deemed to be employed permanently by an employer after a period of 3 months has elapsed and where their employers have not provided any justifiable reasons for fixing the term of the contract in the employee’s employment contract.
- Pertaining to the EEA, an employee earning more than the earnings threshold who has an unfair discrimination dispute in terms of Chapter II of the EEA is not permitted to refer the dispute to the CCMA for arbitration unless the dispute relates to alleged unfair discrimination on the grounds of sexual harassment, or the parties all agree to arbitration being conducted in the CCMA. Absent an agreement, a party is obliged to refer the dispute to the Labour Court for adjudication.
- An employee or worker earning below the new earnings threshold as defined in section 1 of the NMWA may refer a dispute to the CCMA concerning the failure to pay any amount owing to that employee or worker in terms of the BCEA, NMWA, a contract of employment, a sectoral determination, or a collective agreement.
[Source: https://bit.ly/3LO0PrN]