CLAIRE BISSEKER: Exemption clause threatens success of new minimum wage system
Severely curtailing exemptions could backfire if it leads to widespread non-compliance
The new national minimum wage of R20 an hour came into effect on January 1, and though it’s too early to tell how well the exemption process is working, there are already allegations of bad faith from business. The key benefit of the minimum wage is that it raises the pay of the working poor — about 6-million people who don’t earn enough to escape from poverty. In the process it should also promote labour stability and raise worker productivity. The concern, however, is that it could wipe out the last remaining pockets of low-skilled, labour-intensive work in the country. Because of the risk to employment, the flexibility afforded by an efficient exemption process is critical. All along, business’s understanding of the National Minimum Wage Act was that firms that could not afford to pay R20 an hour would be fully exempt subject to an independent, objective analysis of their finances. However, in the middle of 2018 the government inserted a threshold clause into the national minimum...
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