can an employer reduce your salary in south africa

, https://mywage.co.za/decent-work/work-and-wages/pay-deductions, https://mywage.co.za/@@site-logo/wageindicator.png, More infomation about Global Wage Comparisons, VIP / Celebrities PAY (in alphabetical order), Wages in Context in South Africa and the world, Living and Working during the Coronavirus Pandemic, Survey on Living and Working in Times of the Coronavirus, Coronavirus Work & Life in Maps and Graphs - updated daily, Daily updated Maps on Living and Working during Coronavirus, Daily updated Graphs on Living and Working during Coronavirus, Contribute to the data collection concerning platform workers, Share your Story about Working for a Platform. However, if the employer went about offering employees the choice in a procedurally fair manner and could genuinely justify the cuts, they would be upheld legally. If the aforementioned conditions are not satisfied the accommodation provided to an employee by their employer is fully taxable in South Africa. You can approach the CCMA (www.ccma.org.za) to assist you in preventing that the employer follows through on the reduced salary. Which platform businesses can be selected for this research? Can an employer ‘force’ an employee to take annual leave during the lockdown? Who takes the blame? Where this is not the case, your employer cannot reduce it without your agreement, as this would change the terms of your contract of employment. Annual leave is regulated under s 20 of the BCEA. yes they can reduce your salary to anything down to minimum wage if they wish. Make sure you know what is in your work Contract. Pay Deductions and work agreement, Payroll Deductions and contract, pay deductions and wages . Employers may not deduct money from a worker’s pay unless: The worker agrees in writing to the deduction of a debt. The Department of Labour has published new regulations which outline South Africa’s new Covid-19 Temporary Employee/Employer Relief Scheme (TERS). SARS: The South African Revenue Service, which is responsible for the collection of all taxes in South Africa. Reduced working time and/or forced shutdown. The total deduction is not more than 25% of the worker’s net pay. Cite this page © WageIndicator 2021 - Mywage.co.za -, But if your company put you on unpaid leave during this time, or if you have been laid off temporarily - or if a company can only afford to pay a part of your salary - you may get a special payout from the UIF, as part of the Covid-19 Temporary Relief scheme, also known as the special Temporary Employee/Employer Relief Scheme (TERS). UIF contributions), court order or arbitration award. Connect one-on-one with {0} who will answer your question. In answer to the above question, yes, you can ask your employee to take a pay-cut, but no, they do not have to agree. But lowering wages has its risks, including breach of contract claims, unfair dismissal claims, and potential breaches of minimum entitlements. This benefit is paid at a flat rate of R 3 500 per employee irrespective of income for the duration of the lockdown or three month period (whichever may be shorter). Reducing an employee’s salary is not an easy decision to make. So the question becomes: if your pay is reduced, can you quit while still being eligible to receive unemployment benefits? Paying less than the approved amount would likely violate the prevailing wage requirements for those visa categories. By continuing to use this site you consent to the use of cookies on your device as described in our cookie policy unless you have disabled them. As South Africa enters the 21-day national lockdown, business owners are understandably confused and concerned about its economic consequences. “Provided the employer follows a fair process and there is a genuine need to cost-cut, they can make employees redundant to cut costs,” Bates explained. it is not taxable. The government has announced that employees may be entitled to claim existing UIF benefits due to reduced working time, in light of the Covid-19 pandemic. While the arbitrator accepted this as a valid reason the demotion was still unfair because the employer had failed to consult with the employee before making the offer. Will their businesses go bankrupt and what happens to employees, if they cannot afford to keep them on or pay them? You can apply for unemployment and see what they say. Fortunately, most jurisdictions, including South Africa, have well established legal principles (including the common law and legislation) which can guide employers and employees in dealing with the virus and the impact it has / will have in the … Check your Pay, Salary, Income with the Salary Check tool. Some companies have implementation “short-time”, for example a 4-day work week – which means a salary cut of around 20%. Can a company change your salary or salary structure during the lockdown? If my employer reduces my salary during the Covid-19 precautionary measures, can he keep it reduced once the precautions are lifted? For a detailed breakdown of how this is affecting the rental market, head here. This is normally in the form of a collective agreement, a written agreement with the employee, legislation or a court (Section 34 of the Basic Conditions of Employment Act 75 of 1997) (BCEA). This can be done by restructuring your salary so that a portion of your salary is paid to you as exempt income i.e. Of course, you’d also prefer to not be left without any income. An employer can change terms and conditions of employment through consultation and negotiation. Understandably, you may not want to work for less than you had been making. By law, employers cannot unilaterally cut an employee's pay. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. However, the majority of companies in South Africa have set a precedent by paying their employees by the 25th of the month, says Arlene Leggat, President of the South African Payroll Association (SAPA). An employer should consult the employee before making any changes to the employees working hours and commensurately reduce wages. Check with your employer to be sure you're able to take on additional projects outside of work. More specifically, employers must take measures to reduce the risk of a Coronavirus infection. Employers should consider at least one week of negotiations before cutting salaries. Unpaid leave or temporary layoffs Where this is the case, an employer may reduce the employee's pay in line with the minimum wage rates. a letter from the employer confirming company shutdown is due to COVID-19. Dear Sir / Madam, Your employer may not unilaterally change your conditions of employment, eg your salary. Roy Bregman and Sharusha Moodley are legal practitioners at Bregman Moodley Attorneys Inc in Johannesburg and Jaco Lessing is a director at Contract Labour in Pretoria. There are laws you need to follow when reducing an employee’s salary. The legal profession’s focus on the future, An overview of the Protection of Personal Information Act. Accurate, reliable salary and compensation comparisons for South Africa The law The law stipulates that employers … Although a business owner would never want to dismiss, retrench or short time its employees, what happens if there is no business – or one that is just surviving – at the end of the lockdown. Q. Do you know when it is legal to make a pay deduction from a salary in South Africa? In answer to the above question, yes, you can ask your employee to take a pay-cut, but no, they do not have to agree. Labour law in South Africa, and more specifically the Basic Conditions of Employment Act, stipulates what “wage” means. South Africa - Get a free salary comparison based on job title, skills, experience and education. This is not meant to be legal advice and employers are encouraged to seek legal help during this evolving time. Bear in mind, should the employee fall ill during the annual leave period, sick leave is applicable. Money can only be taken off an employee’s salary if he agrees to it, or if the employer is legally obliged to do so. December 1st, 2020. Be aware of minimum wage obligations. Is it possible for the employer to change your contract in your probation stadium from only a salary to a salary and Commission? “An employer cannot unilaterally reduce an employee’s salary,” she said. Worker Rights Regarding Payment of Wages in South Africa. Pay Deductions and work agreement, Payroll Deductions and contract, pay deductions and wages. If an employee is not succeeding in their position, it may be time for a pay cut. Employers can only tell you to reduce your hours if it's already outlined in your contract saying that they can. July said that South Africa’s laws were not designed for the current situation. One of the measures that is designed to provide relief to employers and employees in South Africa is the COVID-19 TERS benefit. you may be required to work up to 40 hours), then the employer may reduce your hours. But employers can land themselves in legal trouble if they cut an exempt employee's salary without adhering to wage laws. Salary & Benefits; Employee Benefit Schemes; Can my company take away my bonuses or benefits? Should an employer be in a position to remunerate an employee for a period (typically a month) but would also like to receive the Covid-19 benefit from UIF, the employer should consider the scale of benefits from 60% of remuneration for employees who earn in excess R3 500.00 to 38% for employees who earn R17 712.00 (i.e. I am not exactly sure what else I can advise you on, but if you have any further questions, feel free to ask them before you rate. What many companies in South Africa are doing during the lockdown is to negotiate amendments to employees’ salaries. The deduction is made in terms of a collective agreement, law (e.g. Mywage.co.za is connected to the WageIndicator Network. Director at Contact Labour, Jaco Lessing, discusses the following measures –. Employers must pay the employee’s deductions to benefit funds (pension, provident, retirement, medical aid, etc.). South African COVID-19 Corona Virus. Reply to Nchaka: If the contract makes allwance for 40 hours (i.e. Rights and remedies: How do reality shows violate constitutional rights? Your new employer will in any event have to apply for a new work permit. Employers could safely argue that the impact of COVID-19 on their business negatively impacted its operations on some level. Please note that this benefit is only available if your remuneration from your employer is R600 000 or less for the tax year. The relevant Award or Enterprise Agreement (if one applies) will set minimum pay and conditions. There are no laws that prevent an employer from doing that because the legislature and the courts do not want to get involved in the day-to-day operations. You can listen to the full interview below: The point to remember is that there must be consultation with employees and not a unilateral implementation of a change to terms and conditions imposed by the employer. An employer can process general personal information without an employee’s consent where such processing either protects a legitimate interest of the employee, or is “necessary for pursuing the legitimate interest of the responsible party or of a third party to whom it is supplied”. Complete our Salary Survey and Win a Wage! This decision is therefore one the employees in questions will have to consent to. The forms can be submitted by e-mailing the application to the nearest UIF processing centre. In the event the employer and employee do not reach consensus on the variation of contract, the employer may initiate retrenchment procedures if needed. Accordingly, wage is the money payable or paid to an employee for ordinary hours of work, as agreed between employer and employee. It is, therefore, our view that employers could – during this unprecedented time – engage with employees, where written employment contracts are in place, to vary terms and conditions of employment to have employees take their annual leave during the lockdown period. When it comes to exempt employees, pay can be reduced based on long-term business interests. Your employer may look at reducing your pay in an attempt to reduce their overheads if they're struggling to stay afloat. If an employee is not sick and still willing to attend work, but it is a direct instruction from their employer to remain at home, such employees will still be entitled to earn and receive their normal salary and benefits. A contract can be varied relating to salary reduction, bonus waiver or reduction, compulsory use of annual leave during the lockdown period and so forth. It really is as simple an answer as that. You can take the matter up internally by filing a grievance and discussing the matter with senior management, or you can contact an attorney who will pursue a civil case against your employer. Establishment meetings for the LSSA provincial attorneys’ association, CV portal for candidate legal practitioners, Southern African Development Community Law Society, reduced working time and/or forced shutdown; and, copy of employee’s identity document (ID); and. What follows is a summary of options open to employers. The Labor Contract Law does not provide for pay cuts due to an employee’s misconduct. Bear in mind that a s 189 process has guidelines that must be adhered to and attracts statutory payments like severance pay, notice pay, outstanding leave pay-out and so forth. googletag.cmd.push(function() { googletag.display('div-gpt-ad-1604915830963-0'); }); As coronavirus (CoVID-19) spreads in South Africa, employers and employees alike find themselves in unchartered territory. You’re not allowed to pay an employee less than what’s required under the applicable Award or Enterprise Agreement, and there are significant consequences for getting it wrong including civil penalties and back payments.If an employee i… "If there's any concern as to whether there's a conflict of interest to do work outside, it might be good to get it in writing that it's OK to pursue that," he says. Permalink Reply Quote Printer Friendly.