NEWS
30/05/2018 12:14 BST | Updated 30/05/2018 12:23 BST

Having A Minimum Wage Is One Thing. Enforcing It Is Another Story

Analysts say government must address how adhering to new minimum wage laws will be monitored and enforced, if it is to be successful.

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Around 1,500 members and supporters of the South African Federation of Trade Unions (Saftu) march through the city centre of Cape Town on April 25 2018 to protest against government's proposed minimum wage during a countrywide national strike.

The debate around a national minimum wage and whether it will have a positive or negative impact on employment will be rendered moot if government does not address issues on how its policy will be implemented, monitored and enforced.

This is according to labour analysts, who believe any effects of implementing a national minimum wage will be diminished if processes are not put in place to monitor and enforce the policy.

The National Assembly on Tuesday passed four historic and contentious labour bills that set a new standard for the national minimum wage and outline new criteria for embarking on protected strike action.

By a majority vote mostly made up of ANC MPs, the assembly passed the Basic Conditions of Employment Amendment Bill, the Labour Relations Amendment Bill, the National Minimum Wage Bill and the Communal Property Associations Amendment Bill.

These bills will now go to the National Council of Provinces for approval.

READ: 4 Bills Passed In Parly You Should Know About

The National Minimum Wage Bill sets the minimum wage at R20 per hour or R3,500 per month. It also makes provisions for wages earned by domestic workers and farm workers, setting these at R15 and R18 per hour, respectively. However, these amounts will be adjusted.

The bill is highly contentious. Those in support of it believe it will reduce inequality, bridge South Africa's wage gap and grow the economy. However, critics say it will increase unemployment, because employers will be unable to afford to pay workers.

Labour expert Terry Bell said the bill may only be passed into law next year, by which time increases in fuel levies and VAT will have swelled the cost of living dramatically. He said there are only about 1,500 labour inspectors in the country to cater for millions of workers.

"Nobody polices the sectoral determinations already set out. These sectoral determinations have been in place for years. For example, domestic workers earn different rates in rural and urban areas. There are too few labour inspectors to cater for the millions of workers," he said.

"The national minimum wage proposal passed now will not create more jobs, and neither will it create more unemployment. It will be more of the same unless this is implemented effectively."

Mining and labour analyst Mamokgethi Molopyane said the national minimum wage bill shows progress.

"[Compared] to other countries [that] have implemented a national minimum wage, it is a journey. It will always be contested in South Africa, because we have a vocal and organised labour sector. But we cannot look at this in a linear way and say jobs will be lost," she said.

"It will have the most positive impact on rural workers. Government needs to educate employers in rural areas on why this is important. In the longer run, when you look at the impact wages have in structural inequality, you will see this is a necessary step.

"But government will have to find a solution for monitoring this. Many people do not earn enough to qualify to pay tax. So the South African Revenue Services may not be the best monitor, especially when they are preoccupied with their own problems. The department of labour, the presidency, unions and other stakeholders will have to come together and discuss how this will be monitored and enforced. Otherwise, employers will find loopholes."