The National Minimum Wage (NMW) Commission recommends a CPI plus 3% for 2024 but is sitting with another two proposals as it invites further suggestions from interested parties for the year ahead.
The NMW Commission has published a report in the government gazette to present the Commission’s information and recommendations on the annual review of the national minimum wage and also inviting written representations from the public.
The three proposals tabled in the report are as follows:
- The majority recommendation is the Consumer Price Index (CPI) plus 3%. Eight of the 12 commissioners propose that the national minimum wage increase by CPI plus 3%;
- The recommendation by the Business Constituency is only CPI; and
- The recommendation by an independent expert is CPI plus 0.75%.
The CPI is a measure of the change in prices as paid by consumers for goods and services over time. In South Africa, the latest consumer price inflation, as published by Statistics South Africa, was 5.9% in October 2023, up from 5.4% in September 2023.
The latest invitation for inputs by the National Minimum Wage follows similar calls in August and September 2023. The request is conducted in accordance with section 6(2) of the National Minimum Wage Act, No. 9 of 2018.
The Commission comprises representatives from organised labour, business, community and experts in the field of labour market and conditions of employment.
In terms of the NMWA, the Commission is tasked to review the national minimum wage annually and to recommend adjustments; investigate and report annually to the Minister on the impact of the national minimum wage on the economy, collective bargaining and the reduction in income differentials and to make such information available to the public.
In 2021, the Commission recommended increasing the national minimum wage from R20,76 to R21,69 per hour. The 2022 national minimum wage was revised from R21,69 to R23,19 per hour. In 2023, the minimum wage was adjusted to R25.42 per hour.
If the Commission follows its recommendation, the minimum wage would increase by another 9% next year – meaning the wage could be revised to R27.71 per hour in 2024.
A minimum wage is the lowest remuneration employers can legally pay their employees for each ordinary hour worked. It is illegal for an employer to pay employees less than this minimum floor.
Factors considered by the Commission in the annual adjustment include:
- Inflation;
- The cost of living and the need to retain the value of the minimum wage;
- Wage levels and collective bargaining outcomes;
- Gross Domestic Product (GDP);
- The ability of employers to carry on their businesses successfully;
- The operation of small, medium or micro-enterprises and new enterprises; and
- The impact on employment or the creation of jobs.
Employment and Labour Minister will announce in February 2024 the new rate of adjustment, which will come into operation from 1 March 2024.
