The earnings threshold will increase to R241,110.59, representing a R17,030.11 increase from the earnings threshold that currently applies. The earnings threshold, a determination in terms of section 6(3) of the Basic Conditions of Employment Act (BCEA), impacts the applicability of certain of the provisions of the BCEA, the Labour Relations Act (LRA), and the Employment Equity Act (EEA). Employees who earn above the threshold are not entitled to certain of the protections afforded to those employees who earn below the threshold.
To be able to calculate whether an employee falls above or below the earnings threshold, the determination outlines what should be included in defining "earnings". An understanding of this is essential in seeking to minimise the risk of non-compliance with the BCEA. Importantly, "earnings" in this context must be differentiated from what may otherwise be included in "remuneration" in terms of the Ministerial Determination regulating the Calculation of Employee's Remuneration in terms of section 35(5) of the BCEA.
Therefore, the increase to the earnings threshold may result in an increased number of employees becoming entitled to the stricter protections afforded by labour legislation such as overtime payments. This may, in turn, have financial consequences for employers. An assessment should be conducted by all employers to ensure that the increase and its consequences are accounted for in the workplace and, where necessary, changes to the employment contracts or remuneration structures are affected in order to mitigate the risks of any unintended contraventions of the BCEA or the deeming provisions applicable to atypical employment arrangements.
