Deputy President Cyril Ramaphosa, on Wednesday, told Parliament that the proposed minimum wage will apply to everyone working in South Africa, including foreigners. A minimum wage of R3 500 has been proposed for the country as the government tries to bridge the gap between the rich and poor.
"Our labour laws cover all employees in South Africa, regardless of nationality. When an employment relationship exists, all the rights and obligations enjoyed by South Africans in terms of our labour laws also apply to foreign nationals working in the country," he said.
Ramaphosa further indicated, during his question and answer session in the National Assembly that government would be very hard on companies that fail to adhere to the law. He said failure to comply would result in penalties for those found to be in the wrong.
"Should any employer pay wages below what is prescribed in the sectoral determinations, such an employer will be flouting our labour laws. Before a foreign national can be employed in South Africa, an employer needs to secure a work permit for a foreign national employee. However, an employer can only apply for a work permit for a foreign national in instances where the prospective employee possesses a critical or scarce skill not available in our labour market," he added.
"Should any employer pay wages below what is prescribed in the sectoral determinations, such an employer will be flouting our labour laws.
Ramaphosa explained that once implemented, the national minimum wage would significantly improve the position of the lowest paid workers. According to him, about 47% of workers earn less than R3 500 a month and believed the minimum wage would make a huge difference to their lives.
Parliament also heard that companies could apply for exemptions from the agreed wages but compelling reasons would have to be placed on the table to qualify for that.
"While the recommendation of the panel of experts does not differentiate between private persons and corporate entities, the panel recommended that an exemption mechanism is built into the system. This means that employers who can effectively motivate why they are unable to meet the minimum wage level would be granted an exemption," he said.
Companies could apply for exemptions from the agreed wages but compelling reasons would have to be placed on the table to qualify for that.
Ramaphosa was quizzed on why the amount was set so low but he defended the decision and said the panel that came up with it did not want to course massive job losses by setting a higher amount. He called on members not to dismiss the proposed measure.
He said the move would ensure a better life for many South Africans.
"A number of considerations were taken into account by the panel. What they took into account was the low level of growth in our economy and countries we regard as our competitors. They played around with the figure of R12 500 and they found that it would wipe out jobs, which it would be very difficult to recover from," Ramaphosa emphasized.
"A number of considerations were taken into account by the panel. What they took into account was the low level of growth in our economy and countries we regard as our competitors.
He also touched on the issue of rating agencies and assured the house that South Africa was still a destination of choice for investors. He said the ability of the government to engage with them robustly has done wonders for the country. Ramaphosa, however, admitted that the agencies spoke about what was happening in the political sphere but they were not worried too much by it.
"They were able to give us a rating that is higher than junk status. We are still an investor destination. We hope we will remain investment great going forward. All this happened due to the efforts put in. Let me say that when we engaged with the rating agencies, most of them said the political noise is something they notice but what they credit us with is that we are observing the rules of the game. They were focused on where the growth was going to come from and they said as for the rest, it happens all over the world," he said.