Ramaphosa: 'Historic' minimum wage to come into effect on January 1, 2019

The national minimum wage of R20 per hour will be effective from January 1, 2019, President Cyril Ramaphosa announced at a ceremony on Friday in Kliptown, Soweto.

The location was chosen in a nod to the Freedom Charter, which was adopted there in 1955 and called for a minimum wage.

Ramaphosa signed four bills into law in late November to give effect to a R3 500 monthly national minimum wage for most categories of workers, but did not announce a start date. The ceremonial event on Friday was attended by representatives of business, organised labour and community groups.

The legislation will see a R20 compulsory hourly rate, which will be phased in at R18 an hour for farmworkers and R15 an hour for domestic workers.

Ramaphosa spearheaded the four year process that lead up to the signing on Friday after he was appointed by former president Jacob Zuma in 2014 to stabilise the labour environment.

Earlier Tanya Cohen, the CEO of Business Unity SA, said ratings agencies want to see a stable labour market in Sout Africa, and the minimum wage, together with new provisions in the Labour Relations Act, was credit positive.

She added that the design of the wage took into account affordability and the phasing in of the wage threshold for domestic workers and farmworkers.

"In the end, we did manage to find a sweet spot, between what is socially acceptable and economically efficient," she said.

'Half the nation will benefit'

Cosatu president Zingiswa Losi said half the nation would benefit from the minimum wage directly, as 47% of the workforce currently earns below the threshold. She said it would act as a stimulus for the economy.

Thulani Tshefuta, representing the community sector at the National Economic Development and Labour Council (Nedlac), said the minimum wage should be viewed together with National Health Insurance and the proposal for comprehensive social security which is being discussed at the negotiating forum.