The Department of Employment and Labour has published a new Earnings Threshold under the Basic Conditions of Employment Act (“BCEA”), effective 1 May 2026.

Because the Earnings Threshold determines whether certain Employees are excluded from specific BCEA protections, Employers should review their workforce profile urgently to ensure compliance.

A practical Q&A summary appears below:

1. What is the BCEA Earnings Threshold?

The BCEA Earnings Threshold is an annual earnings amount set by the Minister of Employment and Labour. Employees who earn above this threshold are excluded from certain sections of the BCEA, especially pertaining to working hours and related protections.

Employees earning below the threshold are entitled to those protections.

2. What is the new threshold, and how does it compare to the previous threshold?

Effective 1 May 2026, the new BCEA earnings threshold is R269,600.90 per annum (approximately R22,466.74 per month). The previous threshold was R261,748.45 per annum (approximately R21,812.37 per month).

This reflects an increase of approximately 3%.

3. Why is the increase in the Earnings Threshold important for Employers?

The increase means that some Employees who were previously above the Earnings Threshold may now fall below the threshold if their remuneration has not increased accordingly.

Those Employees may now become entitled to protections relating to overtime, hours of work, meal breaks, Sunday work and related matters.

This can create immediate payroll, rostering and compliance implications.

4. How are “earnings” calculated?

“Earnings” is defined in the BCEA and refers to an Employee’s annual remuneration before deductions (gross salary) but excluding certain payments and/or allowances.

This includes the Employee’s ordinary salary or wage and other regular cash payments arising from employment.

However, the following are excluded when calculating earnings:

• Payments for overtime worked;
• Annual bonuses or other discretionary bonuses;
• Employer contributions to medical aid, pension, provident or similar benefit funds;
• Subsistence or travel allowances intended to reimburse expenses;
• Achievement awards or occasional incentive payments;
• Payments made purely to enable the Employee to work, rather than as remuneration for services rendered, for example, the cost of uniforms, tools, PPE, etc.

The key question is whether the payment compensates the Employee for work performed (usually earnings) or covers costs incurred so the Employee can perform the work (often not earnings).

Because remuneration structures differ from business to business, the calculation should be assessed carefully where Employees earn close to the threshold.

Incorrectly including excluded items may result in an Employee’s earnings being mistakenly processed as above the threshold.

5. Which BCEA provisions are impacted?

Employees earning above the Earnings Threshold are excluded from the following BCEA sections:

• Working time provisions: Limits on normal working hours do not automatically apply, and no automatic statutory entitlement to overtime limits or overtime pay under the BCEA (unless contractually agreed).
• Breaks and rest periods: Statutory meal interval protections and daily/weekly minimum rest periods do not automatically apply.
• Sunday work: Statutory overtime pay requirements for Sunday work may not apply.
• Public holidays: Certain public holiday remuneration protections linked to working time may not apply.
• Night work: Certain night work protections may not apply.

Important note: Even where statutory exclusions apply, contractual terms, collective agreements, internal policies and fairness principles still remain relevant.

6. Does this mean Employers can effectively disregard various provisions of the BCEA pertaining to above-threshold Employees?

No, although certain BCEA protections may not apply, Employers remain bound by:

• Employment contractual provisions
• Company policies
• Health and safety obligations
• Reasonableness and fairness principles
• Other applicable labour legislation

Poorly managed hours of work/excessive work hours can still create risks, fatigue, morale problems, and disputes.

7. What actions should Employers implement?

We recommend the following immediate review:

• Determine which Employees now fall below the new Earnings Threshold.
• Identify Employees earning close to the new threshold, particularly between approximately R21,800 and R22,500 per month.
• Assess whether newly below-threshold Employees should now receive overtime pay or adjusted working hours protections. Assess cost implications where overtime liabilities may arise.
• Review employment contracts for clauses dealing with overtime, hours of work, Sunday work and the associated expectations of Employees’ earning over the Earnings Threshold.
• Ensure managers understand that the threshold has changed and operational practices may need adjustment.

8. What is the biggest practical risk?

The most common risk is assuming an Employee remains above the Earnings threshold when they no longer do. This can result in unpaid overtime claims, payroll underpayments, disputes, and retrospective liability, as Employees earning under the Earnings Threshold can refer a s73A dispute to the CCMA for unpaid overtime claims or any other underpayment claims.

How can we assist?

If you require assistance assessing the impact of the new BCEA threshold on your workforce, or a review of your employment contracts and associated HR policies (especially the Overtime policy), or advice on working hours compliance and payroll adjustments, please feel free to contact us.