South African employer investigated for minimum wage fraud South African employer investigated for minimum wage fraud

South African employer investigated for minimum wage fraud
14 Feb 2019

South Africa's Department of Labour has investigated a fraud case against an employer that misrepresented how much staff should be paid after the company was exempted from paying the national minimum wage.

Section 15 of the country’s National Minimum Wage (NMW) Act allows employers that cannot afford to pay the NMW to apply for an exemption. Such applications are submitted through an online system.

In January this year, an employee of Fleeceytex Knitting Company emailed the office of the Department of Labour’s director general, Thobile Lamati, asking to confirm the authenticity of an exemption notice displayed in their workplace. The employee said the notice indicated that staff were entitled to a rate of R16.00 (US$1.18) per hour from 17 January 2019, which they were subsequently paid on 18 January 2019.

Following an investigation, it was discovered that the employer had indeed applied for an exemption from paying the legislated R20.00 (US1.47) per hour, based on the fact that he had insufficient profits and assets. But the exemption granted a wage rate of R18.00 (US$1.32) per hour rather than the R16.00 per hour displayed.

During a meeting, the employer confirmed he had applied for an exemption on 17 January 2019 and was granted an exemption rate of R18.00. He also confirmed that an exemption notice showing a rate of R16.00 was both erroneously displayed in the workplace and used to calculate employee’s wages, which were subsequently paid on 18 January 2019.

According to Business Report, the company has since rectified the issue and is now displaying the correct exemption notice. The Department of Labour says it is intent on naming and shaming employers that engage in fraudulent activities.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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South Africa's Department of Labour has investigated a fraud case against an employer that misrepresented how much staff should be paid after the company was exempted from paying the national minimum wage.

Section 15 of the country’s National Minimum Wage (NMW) Act allows employers that cannot afford to pay the NMW to apply for an exemption. Such applications are submitted through an online system.

In January this year, an employee of Fleeceytex Knitting Company emailed the office of the Department of Labour’s director general, Thobile Lamati, asking to confirm the authenticity of an exemption notice displayed in their workplace. The employee said the notice indicated that staff were entitled to a rate of R16.00 (US$1.18) per hour from 17 January 2019, which they were subsequently paid on 18 January 2019.

Following an investigation, it was discovered that the employer had indeed applied for an exemption from paying the legislated R20.00 (US1.47) per hour, based on the fact that he had insufficient profits and assets. But the exemption granted a wage rate of R18.00 (US$1.32) per hour rather than the R16.00 per hour displayed.

During a meeting, the employer confirmed he had applied for an exemption on 17 January 2019 and was granted an exemption rate of R18.00. He also confirmed that an exemption notice showing a rate of R16.00 was both erroneously displayed in the workplace and used to calculate employee’s wages, which were subsequently paid on 18 January 2019.

According to Business Report, the company has since rectified the issue and is now displaying the correct exemption notice. The Department of Labour says it is intent on naming and shaming employers that engage in fraudulent activities.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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