On the 9th February 2022, the Minister of Employment and Labour issued a notice via Gazette No. 45890 that increases the BCEA (Basic Conditions of Employment Act) earnings threshold from R211 596,30 to R224 080,48 per annum with effect from 1 March 2022.
What does the BCEA Earnings Threshold apply to?
In a nutshell, the BCEA earnings threshold governs the sections of the BCEA that regulate the hours of work. The notice states:
“… all employees earning in excess of R224 080,48 (two hundred and twenty four thousand, and eighty rand, forty eight cents) per annum [must] be excluded from sections 9, 10, 11, 12, 14, 15, 16, 17(2) and 18(3) [of the BCEA]”.
This means that employees who earn more than the BCEA earnings threshold are excluded from sections of the BCEA and are therefore not entitled to the automatic protection and rights provided by the following sections:
- Section 9 (Ordinary hours of work)
- Section 10 (Overtime)
- Section 11 (Compressed working week)
- Section 12 (Averaging of hours of work)
- Section 14 (Meal intervals)
- Section 15 (Daily and weekly rest period)
- Section 16 (Pay for work on Sundays)
- Section 17(2) (Night work)
- Section 18(3) (Public holidays not ordinarily worked)
It is only employees that earn below the BCEA threshold that enjoy the protection of these sections of the BCEA, and for example, are entitled to overtime pay at a rate of 1.5 times the normal hourly wage rate.
Employees that earn above the threshold are precluded from these automatic protections (e.g. they are not automatically entitled to overtime). These provisions of the BCEA must then be provided for in the employment contract.
What are ‘BCEA Earnings’?
The notice defines ‘Earnings’ to be:
“… the regular annual remuneration before deductions, i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration for the purpose of this notice.”
In the BCEA ‘remuneration’ is defined as “… any payment in money or in kind, …made …in return for that person working for any other person.” BCEA remuneration is a complex subject and is not discussed in this article.
In short, excluded from BCEA remuneration are:
- Allowances
- Benefits that are not granted in return for ‘work done’ (in other words, benefits that are granted in return for ‘work done’ are BCEA remuneration).
Should you require any assistance with the interpretation of this legislation or its impact on your business please do not hesitate to contact our HR Team on [email protected].