a letter from the employer confirming company shutdown is due to COVID-19. But can you ask your employees to take a pay-cut, and if so, do they have to agree? Permalink Reply Quote Printer Friendly. 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. 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. What many companies in South Africa are doing during the lockdown is to negotiate amendments to employees’ salaries. 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. An employer should consult the employee before making any changes to the employees working hours and commensurately reduce wages. Section 20(10) provides, inter alia, that annual leave must be taken in accordance with a written employment contract between an employer and employee. Under current law, the predetermined contract of an exempt employee can be adjusted should the employer face financial … Labour law in South Africa, and more specifically the Basic Conditions of Employment Act, stipulates what “wage” means. Check with your employer to be sure you're able to take on additional projects outside of work. Your employer can therefore reduce your pay in the future, but not retroactively. If an employee is not succeeding in their position, it may be time for a pay cut. 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. But, what they can't do is lower your salary without telling you in advance and you (the employee) must agree to it. Will their businesses go bankrupt and what happens to employees, if they cannot afford to keep them on or pay them? Employers may not deduct money from a worker’s pay unless: The worker agrees in writing to the deduction of a debt. Worker Rights Regarding Payment of Wages in South Africa. Should the employer experience financial difficulties, salary reduction is an option to be discussed with employees before retrenching them, but it has to be a consultative process. There are laws you need to follow when reducing an employee’s salary. Of course, you’d also prefer to not be left without any income. Visit the De Rebus website to view the De Rebus archives online.…. During the lockdown, and where practical, the consultative processes can be conducted by e-meetings, e-mails or over the telephone. Employers may not deduct money from a worker’s pay unless: The worker agrees in writing to the deduction of a debt. Find out all about state Minimum Wages for all official sectors. Cut staff hours. Employers must pay the employee’s deductions to benefit funds (pension, provident, retirement, medical aid, etc.). 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. Good afaternoon. Employee Benefit Schemes. It is tempting to ask everyone to take a 10% pay cut to try and keep the business afloat. So the question becomes: if your pay is reduced, can you quit while still being eligible to receive unemployment benefits? You can apply for unemployment and see what they say. An employer can change terms and conditions of employment through consultation and negotiation. You can listen to the full interview below: Spouses, life partners, children and nominated persons, in that order, are eligible to apply. Deductions for damage or loss caused by the worker may only be made if: The employer has followed a fair procedure and given the worker a chance to show why the deduction should not be made. How can employees get paid during South Africa’s Covid-19 lockdown? Reply to Nchaka: If the contract makes allwance for 40 hours (i.e. Pay Deductions and work agreement, Payroll Deductions and contract, pay deductions and wages. If a salary is reduced without consultation or employee agreement, an employee now has three legal opportunities to seek redress from his or her employer. It’s not an uncommon question. 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”. This provision will only apply if that employee was not present in South Africa for a period exceeding 90 days during the tax year immediately preceding the date of arrival in South Africa. Pay Deductions and work agreement, Payroll Deductions and contract, pay deductions and wages . When can a deduction be made from my salary? More information on where your closest CCMA offices are located can be found on www.ccma.org.za. Can my boss deduct money from my salary? Traditionally matters of national well-being have been viewed as government’s problem which they must address. If an employee’s salary is more than the maximum threshold amount of ZAR 17 712 - for example, ZAR 20 000 - the employee would not receive a percentage of ZAR 20 000, but would receive 38% of the threshold amount of ZAR 17 712. The deduction is made in terms of a collective agreement, law (e.g. Your employer may look at reducing your pay in an attempt to reduce their overheads if they're struggling to stay afloat. Before you go and reduce an employee’s salary, you should know your minimum obligations under Awards and Enterprise Agreements. Before the Covid-19 pandemic, South Africa’s economy and workforce were characterised by high levels of unemployment and income inequality. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. Employers must complete the UI19 form stating the last date of termination and the reason thereof. 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. 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). you may be required to work up to 40 hours), then the employer may reduce your hours. What You Can Do: Be proactive. The employer may legally reduce an employee’s salary if he or she violates its policies. In the event the employer and employee do not reach consensus on the variation of contract, the employer may initiate retrenchment procedures if needed. An employer cannot reduce any employee's salary to below the current minimum wage. But employers can land themselves in legal trouble if they cut an exempt employee's salary without adhering to wage laws. Despite the strict rules for exempt classification, employers can still reduce employees' salaries in some situations. 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. 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. Regulation 35(4) of the Pension Funds Act regulations is declared invalid and unenforceable, Pauperien liability: Strict liability reigns supreme again, Employment law update – Unfair dismissal referred to CCMA when pending automatically unfair dismissal claim in the Labour Court, Employment law update – Resigning after disciplinary inquiry but before sanction handed down and Labour Court’s jurisdiction to hear a claim for unlawful dismissal, Recent articles and research – December 2020, Electoral reform – constitutionality of the Electoral Act. Be aware of minimum wage obligations. Gleeson warned that employers should bear in mind that salary payments are contractual entitlements of employees, and are protected by contract law and potentially also by awards, enterprise agreements and the National Employment Standards. Where a company shuts down for a certain period or implements short time, for every four days worked the employee accumulates one credit day, and maximum credit days payable are 365 for every four completed years of service. The guidelines of the World Health Organization can provide useful guidance, such as making hand sanitizing gel available to workers, reminding workers to stay at home when they feel sick, disinfecting workplaces, etc. Are tenants being robbed of their rental deposits? "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. Q. The MHA had passed an order on March 29 asking all employers to make payment of wages to their workers without any deduction for the period their establishments were under closure during the lockdown. Director at Contact Labour, Jaco Lessing, discusses the following measures –. Complete our Salary Survey and Win a Wage! If my employer reduces my salary during the Covid-19 precautionary measures, can he keep it reduced once the precautions are lifted? This will … Bosses can absolutely lower salaries just like they can raise salaries. Accordingly, wage is the money payable or paid to an employee for ordinary hours of work, as agreed between employer and employee. Read more about Employers not paying full salary must present balance sheet in court: Govt on Business Standard. The employer must pay you the agreed-upon salary for work you've already done. The deduction is made in terms of a collective agreement, law (e.g. 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. A salary reduction is much more than just changing your payroll. Rights and remedies: How do reality shows violate constitutional rights? This enforced leave will not apply for periods of self-isolation or quarantine and only applies to the statutory portion of annual leave (ie, 15 business days). If there is no agreement, annual leave must be taken at a time determined by the employer in accordance with s 20. “An employer cannot unilaterally reduce an employee’s salary,” she said. Alternatives include, but are not limited to, short-time implementation and/or temporary dismissal. Dear Sir / Madam, Your employer may not unilaterally change your conditions of employment, eg your salary. You can take this to the CCMA as an unfair labour practice. Check your Pay, Salary, Income with the Salary Check tool. Unfortunately, employers can, in most cases, cut your pay or reduce your hours since most employees are "hired at will." You can approach the CCMA (www.ccma.org.za) to assist you in preventing that the employer follows through on the reduced salary. Legally, an employer cannot impose a pay cut upon its employees if they have an employment contract that sets out details of their salary entitlement. December 1st, 2020. Workers also cannot be required to work additional hours without fair compensation. Please note that this benefit is only available if your remuneration from your employer is R600 000 or less for the tax year. The issue is further clarified in Section 35(1) of the BCEA, which states: “an employee’s wage is calculated by reference to the number of hours the employer … However, if it states that you “must” work for 40 hours, you may possibly have claim for wages for 40 hours even if your employer requires you to work less. To reduce your hours. Gleeson advised that if an employer was to reduce an employee’s salary, for example below the national adult minimum wage (currently $656.90 per week), this would be a breach of the National Minimum Wage Order. _____ Anonymous Date: Mar 16, 2017. As coronavirus (CoVID-19) spreads in South Africa, employers and employees alike find themselves in unchartered territory.