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Tips, advice, and information for South African business owners

03 Dec

National Minimum Wage & Parental Leave

In case you missed it, two important labour law amendments were finally signed into the law last week: the national minimum wage, and extended parental leave.

The national minimum wage has been in the headlines for years, so this is a belated resolution to a policy that has been fraught with controversy since its inception. At R20 an hour (less for farm and domestic workers), it probably won’t affect your business much. However, that could change when it is reviewed (and inevitably increased) on a semi-annual basis (especially when said reviews coincide with political elections).

The extended parental leave provisions are part of an update to the Basic Conditions of Employment Act. The amendment entitles all parents to at least ten consecutive days of leave following the birth of their child, and at least ten consecutive weeks of leave following the adoption of a child younger than two.

Parental leave has the potential to be very disruptive, particularly for smaller businesses where the absence of even a single team member for a few weeks (let alone months) can severely impair productivity. Every business owner should have a contingency plan in place, since the days of only having to worry about losing female employees for an extended period due to maternity leave are officially over.

Parental leave functions similarly to maternity leave (i.e. you aren’t obligated to remunerate your employees during their absence since they can claim from the Unemployment Insurance Fund). So, in theory, there’s no direct mandatory cost. However, that could change if your business has set a precedent of paid maternity leave since not extending the same benefits to all employees could constitute unfair discrimination.

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