Threshold Earnings and the BCEA

From 1 July 2011, employees earning more than the new threshold of R 172,000.00 per year will not automatically benefit from certain sections of the BCEA.

The Basic Conditions of Employment Act, 1998 (BCEA) provides employees who earn below a threshold laid down from time to time with certain basic employment rights that entitle them, e.g., to:

  • work a maximum of 45 hours in any week after which they must be paid overtime (sections 9 and 10);
  • insist on a one hour meal interval (section 14), daily and weekly rest periods between ending and recommencing work (section 15) and to be paid for work done on Sundays (section 16);
  • qualify for the protection in relation to night work (section 17(2)) and are automatically entitled to additional pay for working on public holidays (section 18(3)).

From 1 July 2011, employees earning more than the new threshold of R 172,000.00 per year will not automatically benefit from certain sections of the BCEA. The previous threshold was R 149,736.00 per year.

By the same token, the potential pool of employees who are automatically entitled to overtime pay and for additional remuneration for work performed on weekends and public holidays will therefore increase from 1 July 2011.

So, in respect of staff that will earn below the new threshold, employers must adjust existing employment contracts, collective agreements and policies, so that employees are paid more than what they are presently entitled to.

In calculating an employee’s annual earnings for purposes of the monetary threshold, “earnings” means the regular annual remuneration before any deductions such as income tax and pension and medical payments. Earnings exclude contributions which the employer makes in respect of the employee (for instance contributions towards medical aid and pension funds). In particular, subsistence and transport allowances, achievement awards and payments for overtime worked are not regarded as remuneration for the purpose of calculating an employee’s earnings.

For a more detailed explanation, read here.

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