Question: Wage Payments

Question:

If the minimum wage according to the Sectoral determination is R1700-00 per month, are we correct if we pay the person as follows:

Your total direct cost to the company will be R1700-00 per month made up as follows:

Cash:            R1545-45
Provident fund:  R154-55
(10%) company contribution

Are we still conforming to the minimum wage law although we are paying the person only R1545-45 cash and the rest as a provident contribution?

Answer:

The industry in which you operate, namely the retail and wholesale distribution sector does not make provision for provident fund membership or contributions to be paid by employers on behalf of its employees.  It follows that in terms of the applicable sectoral / wage determination your employee is entitled to be paid his / her full wage of R1 700.00.  Nothing, however stops you from agreeing with your employee that his / her remuneration is structured in the way as proposed.  It is, however, only after agreeing to such a remuneration structure, that such particular pay practice will be lawful and compliant.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: