BCEA Earnings Threshold Increase Effective 1 April 2025: Implications for South African Businesses (Labour Law)

The Minister of Employment and Labour has published Government Notice 52232 (hereafter the Notice), increasing the earnings threshold under the Basic Conditions of Employment Act (BCEA) 75 of 1997. This adjustment, effective 1 April 2025, raises the threshold from R254,371.67 to R261,748.45 annually (or R21,197.63 to R21,812.37 monthly). Below is an overview of the implications for businesses and employees.

Key Context

The BCEA establishes minimum employment terms and conditions for employees (excluding independent contractors). While the distinction between employees and contractors is legally significant, this article focuses on the threshold adjustment. The BCEA aligns with Section 23(a) of South Africa’s Constitution, which safeguards the right to fair labour practices.

Threshold Application

The BCEA does not apply uniformly to all employees. Protections under specific sections of the Act are limited to employees earning below the updated threshold. Those earning above the threshold are exempt from certain statutory entitlements.

Definition of “Earnings”

Per the Notice, earnings refer to regular annual remuneration before deductions (e.g., income tax, pension, or medical contributions), but exclude employer contributions to benefits. Allowances (e.g., transport, subsistence), overtime pay, and achievement awards are also excluded.

Implications for Employees Below the Threshold

Employees earning less than R261,748.45 annually (or R21,812.37 monthly) retain full BCEA protections, including rights to:

• Regulated ordinary working hours (Section 9)

• Overtime compensation (Section 10)

• Compressed work schedules (Section 11)

• Averaging of working hours (Section 12)

• Meal intervals and rest periods (Sections 14 and 15)

• Premium pay for Sunday work (Section 16)

• Night work allowances (Section 17(2))

• Public holiday pay (Section 18(3))

Implications for Employees Above the Threshold

Employees exceeding the threshold lose automatic entitlement to the above protections. Their terms—including overtime, rest periods, and premium pay—must be negotiated individually or through employment contracts.

Important Clarification

The BCEA threshold increase does not affect the Unemployment Insurance Fund (UIF) monthly contribution limit, which remains capped at R17,712 per month (effective 1 June 2021).

Conclusion

Businesses must review employee earnings and update contracts or policies to align with the revised threshold. Employers with staff earning above R261,748.45 annually gain flexibility in negotiating working conditions but must ensure compliance for employees below the threshold. Legal advice is recommended to navigate these changes effectively.

Note: This article does not address the distinction between employees and independent contractors, which requires separate legal analysis.

Bibliography:

Constitution of the Republic of South Africa, 1996

Basic Conditions of Employment Act 75 of 1997 (BCEA)

BCEA Earnings Threshold Gazette No 52232