The Minister of Labour Mildred Nelisiwe Oliphant recently published an amendment to Sectoral Determination No 14 for the Hospitality Sector, providing for a minimum wage increase of Consumer Price Index (CPI) 5.7% plus 1.5% effective 1st July 2016 – 30th June 2017.
Peter Cumberlege, Legislative Consultant for FEDHASA Cape - the official voice and representative of the hospitality industry, says: “At this stage it would appear that no changes have been made to the minimum conditions of employment as set out in Sectoral Determination 14 Regulation 437 published back in May 2007 however, an increase to the minimum wage has a far greater impact on smaller businesses - such as boutique hotels, bed and breakfasts and privately-owned restaurants – as the larger hospitality groups and independents usually pay well above the minimum. Bearing in mind that the minimum wage increase formula is fixed at CPI for April each year and considering that the Commission did not amend the 1.5%, I would say that the increase was in line with employers expectations.”
Last year’s wage increases were determined by using the April 2015 CPI excluding owners’ equivalent rent at 4.6% plus the 1.5% provided for by the determination resulting in a total increase for 6.1%. This year CPI came in at 5.7% plus the 1.5% provided for in the determination resulting in a total increase of 7.2%. This means that the current minimum wage for establishments with 10 or less employees is R 2959.35 per month, and R 3298.52 per month for those with 10 or more employees.
Fedhasa Cape Chairman Rob Kucera commented on behalf of the organisation, “We are particularly pleased with this outcome, because although it is necessary for businesses to take into account the rising cost of living and adjust wages accordingly, we believe that this progression of minimum wage will allow our members to continue to grow their businesses.”