Due to several findings raised by third-party audit firms recently, it has come under SIZA’s attention that there are still businesses who do not pay the minimum wage rate per hour, specifically because they use a piece-rate system. By law, no employee may receive less than R21.69 for each hour worked, regardless of the type of work being conducted.
Employees cannot only be paid for bags packed or crates picked for example, as they will need to be remunerated for each hour worked, in accordance with the National Minimum Wage Act. Even if an employee requests to be paid on a piece-rate system, it still remains against the law to pay the employee less than the minimum wage per hour.
There is no reason to justify a wage below the minimum. Piece-rate calculations must be calculated on top of the minimum wage for each hour worked and cannot be the only determining factor for payment if it is less than the specified minimum wage. If the employee works for eight (8) hours, the employee must be paid for each hour at the minimum wage rate. If he/she exceeded a target, for example by picking more crates, they can earn more than the minimum wage rate for each crate picked or bag packed additionally, but the remuneration for each hour worked must still be equal to or above the minimum wage as determined by law. Furthermore, in line with Section 9A of the Basic Conditions of Employment Act, if an employee works for four (4) hours or less on any day, they still need to be paid for at least four (4) hours work, regardless of the piece-rate system.
Members need to have adequate systems in place to manage and record hours worked. There should then be a system in place to ensure every employee is paid according to the number of hours worked. If the business does not make use of an electronic clocking system, there must be an attendance register which adequately indicates the hours worked for each person.
For information on the penalties applicable by law when employers fail to pay the minimum wage, please go to the National Minimum Wage Act, 2018.