PRESENTATION OF THE ADVISORY PANEL REPORT ON THE NATIONAL MINIMUM - - PowerPoint PPT Presentation

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PRESENTATION OF THE ADVISORY PANEL REPORT ON THE NATIONAL MINIMUM - - PowerPoint PPT Presentation

Jan 21, 2024 10 likes •272 views

Advisory Panel National Minimum Wage PRESENTATION OF THE ADVISORY PANEL REPORT ON THE NATIONAL MINIMUM WAGE Advisory Panel National Minimum Wage Terms of reference Approach Recommendations Evidence Implementation

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PRESENTATION OF THE ADVISORY PANEL REPORT ON THE NATIONAL MINIMUM WAGE

Advisory Panel

National Minimum Wage

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SLIDE 2
  • Terms of reference
  • Approach
  • Recommendations
  • Evidence
  • Implementation
  • Architecture
  • Summary

Advisory Panel

National Minimum Wage

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SLIDE 3

TERMS OF REFERENCE

Advisory Panel

National Minimum Wage

  • Consider proposals by Nedlac constituencies
  • Recom
  • mme

mend nd

  • level or range for first NMW
  • Recommend medium term target and mechanisms to achieve this
  • Design of NMW to maximise impact on poverty, unemployment and inequality
  • Exclusions, tiers, exemptions or phase-ins
  • Consider
  • Potential impact on employment
  • Impact on bargaining council agreements, collective bargaining and sectoral

determinations

  • Recom
  • mme

mend nd

  • Actions to minimise negative and maximise positive effects
  • Social and economic benchmarks to review NMW (including GDP, CPI, average

wage, median wage, minimum living level and collectively bargained wages)

  • Review period
  • Institutional and legal framework
  • Any further measures for consideration

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SLIDE 4
  • Terms of reference
  • Approach
  • Recommendations
  • Evidence
  • Implementation
  • Architecture
  • Summary

Advisory Panel

National Minimum Wage

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SLIDE 5

Advisory Panel

National Minimum Wage

 Importance of this policy intervention  Evidence-based

  • Micro evidence accepted by all parties
  • International evidence
  • Economic projections on impact

 Level vs range  Unanimous agreement by Panel  Specific considerations

  • Small business
  • Informal sector
  • Care-work sector
  • Collective bargaining

APPROACH

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SLIDE 6
  • Terms of reference
  • Approach
  • Recommendations
  • Evidence
  • Implementation
  • Architecture
  • Summary

Advisory Panel

National Minimum Wage

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Advisory Panel

National Minimum Wage

 The number

  • R20 per hour (minimum 4 hours work per day)
  • R3500 per month
  • Domestic Workers 75%
  • Agriculture Workers 90%

 Institutional arrangement

  • Decent Work Commission

 2 –year Implementation phase

  • Legal set up 2017
  • Implementation and monitoring 2018-2019
  • Review 2019
  • Small Business extra year

RECOMMENDATIONS

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Advisory Panel

National Minimum Wage

 Why no adjustment of NMW over 2-year phase in ?

  • This will reduce the real-value
  • Any adjustment should be evidence-based
  • Introduce
  • Observe and monitor, and assess impact
  • Then adjust the level in 2019
  • If benign then adjust to catch up for

loss in the real value

  • If disemployment effects high then

adjust accordingly

  • Allow enterprises time to adjust
  • Enforcement by persuasion during

phase in

  • NOTE: ECC processes will continue

RECOMMENDATIONS

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SLIDE 9
  • Terms of reference
  • Approach
  • Recommendations
  • Evidence
  • Implementation
  • Architecture
  • Summary

Advisory Panel

National Minimum Wage

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SLIDE 10

Advisory Panel

National Minimum Wage

EVIDENCE

22.3% 7.6% 14.3% 46.0% 9.9% Uncovered (2 355 142) Bargaining Council Private (799 827) Public Sector (1 508 423) SD (4 870 884) Trade Union Private (1 049 784)

Minimum wage coverage

Source: DPRU (2016)

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Advisory Panel

National Minimum Wage

EVIDENCE

Sectoral wage distribution

Source: Finn (2016) calculations from LMDSA 2014 dataset. August 2016 prices. 8

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Advisory Panel

National Minimum Wage

EVIDENCE

Assump mptions ns Mean Median an

 All earne ners includ uding ng zero

  • earne

ners R8 773 R3 442  Zero

  • earne

ners remov

  • ved

R8 810 R3 476  Hourly average age *45*4.3 .3 (all workers) R9 690 R3 784  F&I ex. . agri. . and domestic *45*4.3 .3 (full-time me) R10 634 R4 485

Mean and median wages under various assumptions

Source: Finn (2016) calculations from LMDSA 2014 dataset

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Advisory Panel

National Minimum Wage

EVIDENCE

Minimum wages in selected emerging economies

Source: Rani, Belser, Oelz, and Ranjbar, Minimum wage coverage and compliance in developing countries, International Labour Review, Vol. 152 (2013), No.3-4.

12 0.37 0.33 0.28 0.51 0.39 0.33 0.48 0.58 0.77 0.69 0.41 0.42 0.48 0.68 0.72 0.78 0.78 0.82 0.98 1.05

0.2 0.4 0.6 0.8 1 1.2 Vietnam (2011) Mexico (2010) Mali (2010) Peru (2010) India (2010) South Africa (2017) Brazil (2009) Costa Rica (2011) Phillipines (2009) Indonesia (2009) Mininum to Mean Minimum to Median

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Advisory Panel

National Minimum Wage

EVIDENCE

Wage distribution by firm size

Source: Rankin 2016

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SLIDE 15

Advisory Panel

National Minimum Wage

EVIDENCE

Distribution of wages

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SLIDE 16
  • Terms of reference
  • Approach
  • Recommendations
  • Evidence
  • Implementation
  • Architecture
  • Summary

Advisory Panel

National Minimum Wage

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Advisory Panel

National Minimum Wage

 2017 set up of legal and institutional arrangements  2 year monitoring process  2019 first review of level  Small business = 1 year extra  Efficient information campaign around exemptions

IMPLEMENTATION

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Advisory Panel

National Minimum Wage

EXEMPTIONS Exemption process to apply

  • On an economic or business case
  • Sector or enterprise
  • Assessment on a documentary proof basis
  • Efficient

IMPLEMENTATION

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Advisory Panel

National Minimum Wage

EXCLUSIONS

  • Own account workers
  • Family labour
  • EPWP

IMPLEMENTATION

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SLIDE 20
  • Terms of reference
  • Approach
  • Recommendations
  • Evidence
  • Implementation
  • Architecture
  • Summary

Advisory Panel

National Minimum Wage

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Advisory Panel

National Minimum Wage

ARCHITECTURE

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Advisory Panel

National Minimum Wage

ARCHITECTURE

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Decent Work Commission EXPERT PANEL Employment Equity EXPERT PANEL Employment Conditions EXPERT PANEL National Minimum Wage

EXPERT PANEL National Minimum Wage 3 Organised Business 3 Organised Labour 4 External experts

Full-time Commissioner (CEO)

Appointed by Minister of Labour Appointed by Presidency

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Advisory Panel

National Minimum Wage

ARCHITECTURE

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EXPERT PANEL NMW Mandate

Annually review level and recommend any changes timeously Establish strong data- gathering and research capacity to inform deliberations Publish annual report Engage Nedlac on the NMW Deliberate on broader wage policy

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Advisory Panel

National Minimum Wage

ARCHITECTURE

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Mechanisms to support NMW

Review role of ECC and EEC Capacitate DoL and labour inspectorate Extend jurisdiction of CCMA, Labour Court and Labour Appeal Court Develop dispute resolution processes and enforcement instruments

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SLIDE 25
  • Terms of reference
  • Approach
  • Recommendations
  • Evidence
  • Implementation
  • Architecture
  • Further policy considerations
  • Summary

Advisory Panel

National Minimum Wage

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Advisory Panel

National Minimum Wage

SUMMARY

 LEVEL R20/hour; R3500/month  TWO-YE YEAR AR PHASE IN IN

  • set up 2017
  • Adjustment for 2 years
  • Review and recommend change in 2019
  • One more year for enterprises with less than 10

workers  EXEMPTIO IONS AND EXCLUSIO IONS

  • Exemption process to apply
  • On an economic or business case
  • Process on a documentary proof basis
  • Efficient
  • Exclusions: EPWP, Own-account workers

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