by Anna Malczyk on 08/07/11 at 11:24 am
Labour Minister Mildred Oliphant has announced a change to the Basic Conditions of Employment Act (BCEA) – one of South Africa’s most important pieces of labour legislation. The change raises the threshold under which employees should be compensated for overtime work and work on public holidays and Sundays. The change came into force from 1 July 2011 and all employers should be aware of the impact the law may have on their business.
What is the BCEA?
As its name implies, the BCEA defines the basic conditions that all employees in South Africa are entitled to work in. It covers matters like leave, work and rest times, termination of employment and remuneration. It applies to all workers in the country, except where certain specific provisions exclude senior managers and those who earn above a certain pay threshold.
How does overtime work?
An employer may not ask or require an employee to work overtime unless the employee has specifically agreed to do so, and this agreement lapses after one year. If there is an agreement, the employee may not work more than three’ hours overtime a day or 10 hours’ overtime a week. The employee must be compensated for the time worked either with extra pay (one and a half times the usual wage), time off (90 minutes paid time off per hour worked) or a combination (one hour’s pay and 30 minutes time off). The compensation clause does not apply to employees above a certain pay threshold.
What is the overtime threshold?
The labour minister determines the threshold above which employees are not compensated for working overtime. Anybody who earns below this threshold is entitled to be remunerated for any overtime worked. Earnings are calculated as the employee’s annual salary before deductions, excluding any employer contributions. Other payment, like a travel allowance, is not included in this calculation.
How does this change affect me?
The new threshold raises the earning total of employees who are entitled to overtime pay. The previous threshold was R149,736 per year (R12,478 per month). It has now been increased to R172,000 per year (R14,333 per month). For business owners and HR managers, this potentially means that more employees are entitled to payment for their overtime work. Employees should also calculate how much they earn and check the provisions of their contracts of employment to see whether they benefit from this provision.
Anna Malczyk is a member of the academic department of GetSmarter, a specialist online training firm. GetSmarter works together with University of Cape Town to present short courses in small business management, project management, internet marketing, financial management and more. View more articles by Anna Malczyk.