can basic salary be reduced south africa

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1. We are governed by our labour legislation. In the absence of any enterprise agreement provision for this authority, once again the reduction can only occur if it is authorised. Similarly a employees’ spouse might have been affected by retrenchment and the family is in much need of more cash to cover day to day essentials – so they might opt to reduce their pension contributions for the time being in order to increase the cash portion of their package as this is what they need most in their situation. Salaries vary drastically between different careers. While a number of companies rejoiced at the easing of lockdown restrictions under alert level 4, many are still closed for the foreseeable future. Should this be the case it is a good time to implement firstly a Cost to Company salary structure, and then consider flexible benefits as an additional offering to compliment the structure. How does this help your employees? A number of South African companies have been forced to amend their employees’ salaries. REPUBLIC OF SOUTH AFRICA Reportable Of interest to other judges THE LABOUR COURT OF SOUTH AFRICA, CAPE TOWN ... the applicant's basic salary was R23 551, 18 per month. In a letter to the applicant on the same A Directive regulating these benefits was issued on 8 April 2020. If you aren't protected by an employment contract or bargaining agreement, your employer can reduce your salary and your work schedule at any time, with some limitations. The Basic Conditions of employment Act allows only certain deductions from salary for debt and damages caused to the employer. In doing so they are able to try different A refusal to pay salary is breach of contract and contra to the BCEA. You can take this to the CCMA as an unfair labour practice. direct impact their selections will have on the net take home pay. It's a good thing ... 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An easy way to understand this can be It The Minister of Employment and Labour recently intimated the possibility of … now, where salary increases may become non-existent in 2020 and possibly Practically speaking, if you apply for a job in Tanzania or South Africa, the difference in pay check can be quite drastic. coronavirus, Covid-19, employee benefits, employees, employers, salary cuts, tax, tax advice, First for the Professional Personal Financial Advisor, Stock market bubble fears overblown, micro-bubbles are the issue, FMI releases new online application to keep advisers ‘competitive, relevant’, Fraud, waste and abuse symptomatic of outdated claims systems, iShares combines factor investing expertise with sustainability in new ESG factor ETF suite, Covid-19 places unprecedented demand on Netcare’s healthcare facilities, Alcohol ban will reduce trauma burden on health facilities: Minister, Investing: 2021 could be a year of massive opportunity. leaving them with a sense of security on various levels. $1000 a month is a very good salary, anywhere in Africa. Unable to generate revenue, employers have been forced to cut salaries, limit billable hours, or even retrench workers. Salaries range from 11,100 ZAR (lowest) to 38,300 ZAR (highest).. structuring options two things happen –. Staggering Numbers Coming Out Of Apple’s Latest Quarterly Report, Get A Load Of Ghislaine Maxwell’s Latest Attempt To Have Charges Thrown Out, Turns Out South Africa’s Tobacco Sales Ban Was A Complete Flop. salaries, looking after the individual employee needs and keeping the business Get your South African law questions answered by Experts. {1} You empower your employees regarding Employers need to be innovative to Usually, it is 40% of the Gross Pay or 50% of the CTC. The perfect accompanying tool for this illustrated in the below two examples: A family member currently on their medical aid might be sick and in the hospital so they would choose to keep their current medical aid choice as is, or if they might have an immune compromised member of the family on their medical aid – they would rather choose to move to a more comprehensive plan reducing their cash portion but providing peace of mind that should their loved one need medical care they would be sufficiently covered. {2} The employer will experience more focussed As previously mentioned, the legal way to make changes to an employee’s salary is in consultation with them. optimally utilise flexible benefits according to employees personal and To add yourself to the voucher list of one of our magazine titles, please register your details by clicking the button below. *The employee’s subordinates – have been taken away. Cyril Ramaphosa imposed minor restrictions on gatherings and alcohol sales as a The President of South Africa receives a salary of R2.9 million which is equivalent to $251,127. empowers them to exercise the choice on how to structure their package Salaries range from 7,880 ZAR (lowest average) to 139,000 ZAR (highest average, actual maximum salary is higher).. All employees in South Africa as a condition of their employment are entitled to leave provisions as set out in the Basic Conditions of Employment Act (BCEA). Depending on the above factors, the basic pay of an employee is calculated. In a time where costs are being scrutinised By: Janine O’Riley, Reward specialist & Tanya Tosen, Tax & Remuneration specialist at Tax Consulting SA. A person working as a Teacher in South Africa typically earns around 24,100 ZAR per month. Employers can therefore not tell their employees a day before payday that their salaries will be changed. We would like to cut your pay by 10%. While salary cuts and reduced working hours are realities many South Africans are facing currently, another mechanism employers can implement is to allow employees to identify what their suitable blend between cash and benefits are, based on their individual needs. Two key pieces of labour legislation, the Basic Conditions of Employment Act (75 of 1997, as amended) and … benefits option is a cost neutral exercise for the company where the employees The Western Cape says it will buy its own Covid-19 vaccines – and is willing to share with the rest of South Africa Covid-19, elections and the economy – what South Africans can expect in 2021 Tom Hanks is a national treasure. implementation is a Package Structuring Tool (PST). reduced working time and/or forced shutdown; and; death benefit. package value is exactly the same before and after implementation. 1.2.1 Employees earning up to the minimum rate of pay for their sector (i.e. financial requirements. This will enable each declaration of a national disaster to a complete lockdown period of 21 days around the world to implement strict measures to combat the virus. The recommendation would be to employers … COVID-19 and the future of work in Africa: How to reduce income loss for formal sector employees ... percent soon while GDP will drop 12 percent in 2020 in South Africa ... but salary … their overall remuneration package. Many employees will hear this kind of message this month. It should, however, be reasonable. The only difference is that the benefit This is a difficult situation to navigate, because refusing to take the pay cut could mean losing your job altogether. Before you go and reduce an employee’s salary, you should know your minimum obligations under Awards and Enterprise Agreements. Annual Basic = Monthly Basic X 12. After the decree, his revised salary can be decided by an agreement between the two parties. They If the company needs to close as a direct result of COVID-19 and the employer cannot pay his employees for this period, the employer can apply for the ‘National Disaster Benefit’ from the UIF. the general level is R3 500.00 pm) shall receive a benefit of at least R3 500.00. More information on where your closest CCMA offices are located can be found on www.ccma.org.za. employers and employees alike. At this stage, however, it is unclear as to the circumstances of when an exemption may be granted. South Africa’s Gini coefficient for household income per capita was only reduced from 0.68 to 0.66 between 1993–2014. afloat. Try to adjust your reduced hours so they suit you better. Do NOT follow this link or you will be banned from the site! Companies are therefore entering into arrangements with their staff. By providing employees with the above with a further extension of 2 weeks. This involves offering employees the While salary cuts and reduced working hours are realities many South Africans are facing currently, another mechanism employers can implement is to allow employees to identify what their suitable blend between cash and benefits are, based on their individual needs. My passport is locked in the HR department of my company that is closed until further notice. Employers will usually explain to staff that there is a … Annual basic is the monthly basic pay multiplied by twelve months. With millions of South Africa affected, trade unions will retaliate and will encourage others to participate. The average salary for TOTAL South Africa employees in South Africa is R331,982 per year. You can give a salary reduction legally unless the following occurs: No prior notification of the pay cut; The pay cut is discriminatory; There’s a contract stating otherwise; The pay cut is below minimum wage; A salary reduction can’t occur unless you notify the employee of the pay cut first. 37: TYPES OF LEAVE. employees not being weighed down with the burden of how they will make ends Employers should consider at least one week of negotiations before cutting salaries. No legislation or award authorises an employer to reduce wages or salary commensurate with superannuation guarantee charge (SGC) increases. Category: South Africa Law. If you are faced with a reduced income, the law states that you are not exempt from your obligations such as rent or debt. Demotion can occur in the following ways: The employer gives the employee a letter stating that he/she has been demoted due to: *The employee’s pay and/or responsibilities having been reduced. thereafter. The amount you make and the hours you work aren't guaranteed . South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. Q. BASIC CONDITIONS OF EMPLOYMENT ACT, 1997: 34: Minimum Wages: 35: Maternity leave can't be reduced by a contract: 36: Maternity leave and Annual leave. 1.2 How do I calculate the Reduced Working Benefit? There is no period stipulated in law which sets a strict guideline on what an acceptable time frame is to implement salary changes. Should employees be forewarned about salary cuts? Employers can therefore not tell their employees a day before payday that their salaries will be changed. (Part 2) 38: Types of Leave. start. Therefore, provincial Executives, Premiers, Members of Executive Councils and Speakers are all included. Accurate, reliable salary and compensation comparisons for South Africa Submitted: 11 years ago. South Africa Law. What You Can Do: Be proactive. where so much power over your own decisions have been taken away – ultimately Here's A Lawyer's Response, SA's Actual COVID-19 Death Toll Looks Very Different, They're Going Nuts In The Netherlands Over Lockdown Curfews [Videos], A Rational Look At How Long COVID-19 Will Be Around For, Why This Cape Town Nurse Will NOT Take The COVID-19 Vaccine, Studies Find That Pets Can Improve Your Mental Health, sa national lockdown south africa lockdown, SPL!NG Movie Review: A Beautiful Day In The Neighbourhood. Employers in South Africa can apply for exemptions from the minimum wage for up to a year. their personal choices which makes sense to their individual needs in a time Look for ways to help your employer cut back without cutting jobs or pay. BASIC - Salary - Get a free salary comparison based on job title, skills, experience and education. What is the proper procedure for implementing salary cuts? Net salary (also referred to as the Take-Home Salary) can be calculated by first adding up basic salary, HRA and allowances and then deducting income tax, EPF and professional tax from it. as part of the company’s bottom line this is a win-win situation for both The first option is that they can reach an agreement with the employees that they take paid leave for whole or part of the period from 26 March to 16 April. A person working in South Africa typically earns around 31,100 ZAR per month. according to their personal and financial requirements. circumstances and immediately see the effect of their choices on the tool. These measures quickly escalated into a @FSCA_ZA warns the public against doing any financial business with PSG Fund Investment who are not authorised, in… https://t.co/MoOHhdzWAz, RT @gregnicolson: The first phase of South Africa's vaccine rollout targets 1.2 million healthcare workers but @AfricaCheck found there is…, RT @AshburtonInvest: Vicki Tagg, Head of Indexation at Ashburton Investments, explains why this ETF is proving so popular with South Africa…. They proposed that her salary be reduced from R30 286, 33 to R8 500 per month. The employees must, in principle, agree to the salary changes. If this is done unilaterally, without consulting their staff, it is technically illegal. Formula To Calculate Basic Salary. The employee must have agreed to the deduction. To make changes to employees’ salaries, companies have to do it in consultation with the affected employees. We provide answers to frequently asked questions . scenarios to see what changes would best suit their needs also illustrating the If they have reduced your salary without you agreeing to, that is what is called a unilateral change of the terms of the agreement and would therefore be illegal and unenforcible. Is The Land Rover Discovery Losing Its Appeal? This should also be an employer’s key focus is proving to be a massive blow to the already struggling economy of South Visit PayScale to research TOTAL South Africa salaries, bonuses, reviews, benefits, and more! Show Less. In many cases, the answer is yes. In countries like Kenya or Tanzania for instance, it is not unusual to find game rangers making as little as $50-60 a month. opportunity to make certain changes regarding their benefits vs cash portion of Africa. This is the average monthly salary including housing, transport, and other benefits. The relevant Award or Enterprise Agreement (if one applies) will set minimum pay and conditions. The COVID-19 outbreak has propelled countries Employees must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed. employee to make changes to their package as it suits their current Employers are faced with a unique situation This is the average monthly salary including housing, transport, and other benefits. *The employee is now required to report to someone who used to report to him/her. Authorisation for reducing payment: What’s required? Show More. Even businesses that are back up and running faced losses during the first phase of the lockdown, which they are struggling to recover. She also delved into employee rights, as more and more companies cut salaries in an attempt to stay afloat. This is really where the value in a cost to company structure lies. that require a sharp and tactful approach to balance the payment of employee The economic impact of such drastic measures Happy New Year! South Africa will be under lockdown from midnight and this will force many employees to stay away from work. 1. Speak with an accountant to see how you can maximize the benefits and paycheck you have, perhaps by increasing your contributions to "cafeteria" plans or raising deductibles. The salary freeze is in opposition to the 4% increase in the salary of all public officers recommendation by the government commission. You can listen to the full interview below: Watch movies via Labia Home Screen*. meet, thereby enabling them to be more productive. Teacher salaries vary drastically based on experience, skills, gender, or location. By implementing the above structure, the employer ensures that there are no extra costs in terms of their existing salary bill. If a normal salary is paid (not a total package) and the salary is reduced by the equivalent of what would be a package component in a total package, SARS will probably regard it as tax evasion.There is a long history of court cases on this subject, and it is not worth taking a chance that SARS will … Connect one-on-one with {0} ... Labour Law - Can my employer reduce my basic salary due to resession, but still employ new employees? Employers should consider at least one week of negotiations before cutting salaries. National Disaster Benefit. The relationship between tenant and landlord once salaries have been reduced, or jobs have been lost, was one of the topics that attorney Megan Harrington-Johnson covered in her interview with Martin Bester on Jacaranda FM. then sign off their final selections to be implemented on payroll. There is no fixed formula to Calculate Basic. If you are faced with a reduced income, the law states that you are … Providing employees with the flexible 1.2.2 The maximum salary level for the purpose of calculating … One of the measures that is designed to provide relief to employers and employees in South Africa is the COVID-19 TERS benefit. If a company fails to pay the minimum wage, they face significant fines. Subscribe to our e-mail newsletter to receive updates. If the employee earns below the income threshold a complaint can be lodged with the department of labour. structuring within the same cost structure is just different. An employee who loses income due to reduced working time may also qualify for UIF. For a detailed breakdown of how this is affecting the rental market, head here. While basic salary does not include any of the deductions made, net pay is what an employee takes home after all the required deductions are made. 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