JOHANNESBURG - South Africa’s National Minimum Wage (NMW) is set to rise from R27.58 to R28.79 per ordinary hour of work from March 1, 2025, representing a notable increase of 4.4%. The announcement was made by Nomakhosazana Meth, the Minister of the Department of Employment and Labour, as part of the government’s commitment to uplift lower-income workers amid rising inflation.
With this adjustment, the minimum wage will apply to all workers, including farm and domestic workers, who have historically been underpaid. The increase, primarily attributed to inflation, is aimed at alleviating the financial strain on working families, thereby protecting their ability to afford basic necessities. “The national minimum wage cannot be varied by contract, collective agreement, or law... it is unfair labour practice for an employer to unilaterally alter work hours or other conditions of employment,” said Thobeka Magcai, spokesperson for the Employment and Labour Department.
The Congress of South African Trade Unions (COSATU) welcomed this wage hike, noting it will provide relief to approximately six million workers currently earning at or near the NMW. Matthew Parks, COSATU’s Parliamentary Coordinator, highlighted the increase as not merely beneficial but necessary, stating, “This positive increase will help protect the value of the NMW and workers’ ability to take care of their families. It will inject badly needed stimulus to the economy, spurring growth, sustaining, and creating jobs.”
Yet, the decision has not gone uncontested. Gerhard Papenfus, CEO of the National Employers Association of South Africa (NEASA), voiced strong opposition to the increase, arguing, “The government interference... will simply lead to unemployment, reduction in working hours, or simply non-compliance by employers.” His concerns reflect the apprehension many employers feel about the sustainability of their businesses under increasing wage demands.
The NMW has undergone annual reviews since its initial introduction in 2019, with adjustments reflecting inflationary pressures. Adjustments include specific exceptions for certain groups, such as workers under the Expanded Public Works Programme, who will see their minimum wage rise to R15.83 per hour as of March 2025. This segment of workers, along with participants of learnership agreements, will benefit from new financial guidelines aimed at supporting skills development within the country.
Wandile Sihlobo, chief economist of the Agricultural Business Chamber (Agbiz), noted the rising input costs faced by the agriculture sector. “Wages can be an issue for some farmers during hard times,” Sihlobo stated, illustrating the delicate balance needed between fair pay and business viability.
Small and medium enterprises (SMEs) are particularly at risk due to this wage adjustment. Justine Lambrechts, senior associate at Kirchmanns law firm, mentioned the unique struggles these businesses face. “The 4.4% increase... may strain already tight budgets,” she explained. “Employers may have to reevaluate their workforce structures, potentially leading to job cuts or reduced working hours.”
The potential consequences of the NMW increase extend to compliance and enforcement as well. According to recent reports, there are challenges surrounding non-compliance, with many employers reluctant to adhere to updated wage standards. Lambrechts pointed out the risks of non-compliance and stated, “I think there’s always going to be room for people to rather ask for forgiveness than permission, and they might try and go under the radar and not comply.”
To navigate these changes, experts are recommending strategic adjustments for employers, such as reevaluations of budget allocations, investments in upskilling workers, and engagement with government support systems to ease the financial burden of compliance.
The mixed responses to the NMW increase encapsulate the broader economic conversation surrounding minimum wages. While it serves the purpose of upliftment for lower-income workers, the operational impacts on SMEs cannot be ignored. The delicate balance between ensuring fair compensation and maintaining business viability remains at the forefront of discussions among stakeholders.
These developments signify a significant milestone as South Africa continues to tackle economic disparities and strive for equitable labor practices. The focus now shifts to collaborative efforts from the government, businesses, and workers to strike the right balance for sustained economic growth.