Demotion can occur in the following ways: The employer gives the employee a letter stating that he/she has been demoted due to: *The employee’s pay and/or responsibilities having been reduced. This is the average monthly salary including housing, transport, and other benefits. To make changes to employees’ salaries, companies have to do it in consultation with the affected employees. opportunity to make certain changes regarding their benefits vs cash portion of An easy way to understand this can be their personal choices which makes sense to their individual needs in a time 1.2 How do I calculate the Reduced Working Benefit? While basic salary does not include any of the deductions made, net pay is what an employee takes home after all the required deductions are made. coronavirus, Covid-19, employee benefits, employees, employers, salary cuts, tax, tax advice, First for the Professional Personal Financial Advisor, Stock market bubble fears overblown, micro-bubbles are the issue, FMI releases new online application to keep advisers ‘competitive, relevant’, Fraud, waste and abuse symptomatic of outdated claims systems, iShares combines factor investing expertise with sustainability in new ESG factor ETF suite, Covid-19 places unprecedented demand on Netcare’s healthcare facilities, Alcohol ban will reduce trauma burden on health facilities: Minister, Investing: 2021 could be a year of massive opportunity. A refusal to pay salary is breach of contract and contra to the BCEA. Employees must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed. Many employees will hear this kind of message this month. BASIC - Salary - Get a free salary comparison based on job title, skills, experience and education. BASIC CONDITIONS OF EMPLOYMENT ACT, 1997: 34: Minimum Wages: 35: Maternity leave can't be reduced by a contract: 36: Maternity leave and Annual leave. Connect one-on-one with {0} ... Labour Law - Can my employer reduce my basic salary due to resession, but still employ new employees? Accurate, reliable salary and compensation comparisons for South Africa In a letter to the applicant on the same (Part 2) 38: Types of Leave. illustrated in the below two examples: A family member currently on their medical aid might be sick and in the hospital so they would choose to keep their current medical aid choice as is, or if they might have an immune compromised member of the family on their medical aid – they would rather choose to move to a more comprehensive plan reducing their cash portion but providing peace of mind that should their loved one need medical care they would be sufficiently covered. financial requirements. A Directive regulating these benefits was issued on 8 April 2020. You can take this to the CCMA as an unfair labour practice. If they have reduced your salary without you agreeing to, that is what is called a unilateral change of the terms of the agreement and would therefore be illegal and unenforcible. The employee must have agreed to the deduction. as part of the company’s bottom line this is a win-win situation for both Africa. Employers can therefore not tell their employees a day before payday that their salaries will be changed. A person working as a Teacher in South Africa typically earns around 24,100 ZAR per month. Employers need to be innovative to If a normal salary is paid (not a total package) and the salary is reduced by the equivalent of what would be a package component in a total package, SARS will probably regard it as tax evasion.There is a long history of court cases on this subject, and it is not worth taking a chance that SARS will … After the decree, his revised salary can be decided by an agreement between the two parties. An employee who loses income due to reduced working time may also qualify for UIF. afloat. You can give a salary reduction legally unless the following occurs: No prior notification of the pay cut; The pay cut is discriminatory; There’s a contract stating otherwise; The pay cut is below minimum wage; A salary reduction can’t occur unless you notify the employee of the pay cut first. While salary cuts and reduced working hours are realities many South Africans are facing currently, another mechanism employers can implement is to allow employees to identify what their suitable blend between cash and benefits are, based on their individual needs. Practically speaking, if you apply for a job in Tanzania or South Africa, the difference in pay check can be quite drastic. Annual basic is the monthly basic pay multiplied by twelve months. Employers should consider at least one week of negotiations before cutting salaries. *The employee’s subordinates – have been taken away. The economic impact of such drastic measures You can listen to the full interview below: Watch movies via Labia Home Screen*. Visit PayScale to research TOTAL South Africa salaries, bonuses, reviews, benefits, and more! How does this help your employees? Should this be the case it is a good time to implement firstly a Cost to Company salary structure, and then consider flexible benefits as an additional offering to compliment the structure. South Africa’s Gini coefficient for household income per capita was only reduced from 0.68 to 0.66 between 1993–2014. If you are faced with a reduced income, the law states that you are not exempt from your obligations such as rent or debt. If the employee earns below the income threshold a complaint can be lodged with the department of labour. A person working in South Africa typically earns around 31,100 ZAR per month. In many cases, the answer is yes. Depending on the above factors, the basic pay of an employee is calculated. By providing employees with the above South Africa Law. Tom Hanks is a national treasure. If you aren't protected by an employment contract or bargaining agreement, your employer can reduce your salary and your work schedule at any time, with some limitations. Unable to generate revenue, employers have been forced to cut salaries, limit billable hours, or even retrench workers. This will enable each Category: South Africa Law. Employers will usually explain to staff that there is a … While salary cuts and reduced working hours are realities many South Africans are facing currently, another mechanism employers can implement is to allow employees to identify what their suitable blend between cash and benefits are, based on their individual needs. leaving them with a sense of security on various levels. At this stage, however, it is unclear as to the circumstances of when an exemption may be granted. circumstances and immediately see the effect of their choices on the tool. The only difference is that the benefit Net salary (also referred to as the Take-Home Salary) can be calculated by first adding up basic salary, HRA and allowances and then deducting income tax, EPF and professional tax from it. Salaries range from 11,100 ZAR (lowest) to 38,300 ZAR (highest).. This is the average monthly salary including housing, transport, and other benefits. declaration of a national disaster to a complete lockdown period of 21 days employees not being weighed down with the burden of how they will make ends package value is exactly the same before and after implementation. Subscribe to our e-mail newsletter to receive updates. Is The Land Rover Discovery Losing Its Appeal? Salaries vary drastically between different careers. Cyril Ramaphosa imposed minor restrictions on gatherings and alcohol sales as a The recommendation would be to employers … Q. By: Janine O’Riley, Reward specialist & Tanya Tosen, Tax & Remuneration specialist at Tax Consulting SA. With millions of South Africa affected, trade unions will retaliate and will encourage others to participate. employers and employees alike. Try to adjust your reduced hours so they suit you better. Even businesses that are back up and running faced losses during the first phase of the lockdown, which they are struggling to recover. Employers are faced with a unique situation The average salary for TOTAL South Africa employees in South Africa is R331,982 per year. Speak with an accountant to see how you can maximize the benefits and paycheck you have, perhaps by increasing your contributions to "cafeteria" plans or raising deductibles. If this is done unilaterally, without consulting their staff, it is technically illegal. where so much power over your own decisions have been taken away – ultimately Show Less. More information on where your closest CCMA offices are located can be found on www.ccma.org.za. If a company fails to pay the minimum wage, they face significant fines. Should employees be forewarned about salary cuts? They now, where salary increases may become non-existent in 2020 and possibly Authorisation for reducing payment: What’s required? What is the proper procedure for implementing salary cuts? 37: TYPES OF LEAVE. This involves offering employees the is proving to be a massive blow to the already struggling economy of South salaries, looking after the individual employee needs and keeping the business This is really where the value in a cost to company structure lies. Annual Basic = Monthly Basic X 12. This should also be an employer’s key focus Employers can therefore not tell their employees a day before payday that their salaries will be changed. There is no fixed formula to Calculate Basic. empowers them to exercise the choice on how to structure their package These measures quickly escalated into a By implementing the above structure, the employer ensures that there are no extra costs in terms of their existing salary bill. In the absence of any enterprise agreement provision for this authority, once again the reduction can only occur if it is authorised. Formula To Calculate Basic Salary. Therefore, provincial Executives, Premiers, Members of Executive Councils and Speakers are all included. Staggering Numbers Coming Out Of Apple’s Latest Quarterly Report, Get A Load Of Ghislaine Maxwell’s Latest Attempt To Have Charges Thrown Out, Turns Out South Africa’s Tobacco Sales Ban Was A Complete Flop. This is a difficult situation to navigate, because refusing to take the pay cut could mean losing your job altogether. Salaries range from 7,880 ZAR (lowest average) to 139,000 ZAR (highest average, actual maximum salary is higher).. The President of South Africa receives a salary of R2.9 million which is equivalent to $251,127. Providing employees with the flexible Employers in South Africa can apply for exemptions from the minimum wage for up to a year. 1.2.2 The maximum salary level for the purpose of calculating … In a time where costs are being scrutinised President {2} The employer will experience more focussed Here's A Lawyer's Response, SA's Actual COVID-19 Death Toll Looks Very Different, They're Going Nuts In The Netherlands Over Lockdown Curfews [Videos], A Rational Look At How Long COVID-19 Will Be Around For, Why This Cape Town Nurse Will NOT Take The COVID-19 Vaccine, Studies Find That Pets Can Improve Your Mental Health, sa national lockdown south africa lockdown, SPL!NG Movie Review: A Beautiful Day In The Neighbourhood. Similarly a employees’ spouse might have been affected by retrenchment and the family is in much need of more cash to cover day to day essentials – so they might opt to reduce their pension contributions for the time being in order to increase the cash portion of their package as this is what they need most in their situation. South African workers will still be entitled to payment, should their employer ask them to remain at home during this crisis. It should, however, be reasonable. Employers should consider at least one week of negotiations before cutting salaries. implementation is a Package Structuring Tool (PST). Look for ways to help your employer cut back without cutting jobs or pay. employee to make changes to their package as it suits their current Happy New Year! She also delved into employee rights, as more and more companies cut salaries in an attempt to stay afloat. 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