Minimum wage can no longer include tips |02 June 2010
It follows an amendment to the employment national minimum wage regulations enacted in 2007, under which tips and payments based on output, productivity and performance were included as part of the basic salary.
The amendment came into effect on April 1, as certain hotels were paying some staff a very low wage, which they claimed was topped up by other cash benefits to meet the minimum wage requirements. This is no longer acceptable, Mr Baker said.
From now on, the minimum wage will be calculated and paid at the rate prescribed by law for each hour worked – R16.50 per hour for workers under a contract of continuous employment or a fixed term or part-time contract, and R19 for casual workers.
Mr Baker said this should not prevent employers from paying the service charge over and above the national minimum wage, since such benefits do not cost them anything.
He added that, likewise, a monthly bonus is paid on performance and therefore should be an extra to the employee’s minimum wage.
Mr Baker said this became an issue when some hotels started introducing a service charge.
There were times when staff were badly paid as the service charge fluctuated, depending on hotel occupancy. If they were on sick leave they did not benefit from it, and often money was deducted for any damage they did while working, such as breaking a glass or plate.
Mr Baker said when the law was enacted in 2007 it was done with good intentions on the understanding that employees would be better off.
Some workers have benefited, but unfortunately the Employment Department has also noted bad practices during inspections, he added.
He said, for example, that an employee working 45 hours should earn a basic salary of about R3,217 a month, and any other benefits should be added to that amount – not be part of it.
The Ministry of Employment and Human Resources Development is urging all establishments to comply with this minimum wage amendment, and to continue to share the service charge with their employees.
He said in sharing such profits workers will be more motivated, and it will encourage them to increase their productivity.
“The ministry will be monitoring closely whether the regulation is being carried out as it is guaranteeing the security of a basic salary for all workers,” said Mr Baker.
Details of the amendment will be circulated to all hotels, and already some employers have contacted the ministry for advice on introducing a service charge and other monetary benefits.
Mr Baker said all employers must comply with the law or they will be prosecuted. If any employees feel they are still affected by such issues they can register their grievances at the Employment Department.
The minimum wage in 2007 was R14.50 an hour, it increased to R15.50 last year and as from January this year it is R16.50.