Does minimum wage in terms of National Minimum Wage Act include bonuses?

National Minimum Wage

Does the minimum wage in terms of the National Minimum Wage Act include the bonus too? This question was raised in a recent Court case – the facts simply put are as follows:

  1. Before the National Minimum Wage Act was enacted, the Company would pay its employees at a rate of R18.00 per hour.  The employees’ contract allowed for a bonus which would either be paid annually or pro-rata on a monthly basis.  The employees elected to paid on a monthly basis as opposed to annually.
  2. After the implementation of the National Wage Act, the Company continued to pay its employees at R18.00 per hour but informed the employees that their actual wage rate was R20.00 an hour when taking into account the bonus payment per month.
  3. The matter was then referred to the CCMA and the Company argued that when looking at the hourly rate of an employee all payments made to the employee should be included.
  4. The Commissioner however did not agree with the Company’s argument and ruled that bonuses should be excluded when calculating an employee’s hourly rate.   The Company was therefore ordered to pay the employees R20.00 per hour as well as their annual bonus from the date on which the National Minimum Wage Act came into operation.

This case is one of many which shows the importance of ensuring proper compliance with legislation.

For more information in ensuring your Company is compliant, please do not hesitate to contact Tracey Mouton from Goldberg & de Villiers Inc on (041) 501 9818, e-mail traceym@goldlaw.co.za.

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