Reminder of ETI Minimum Wage Changes for May to July 2020
This is an important reminder that ETI should only be claimed if your employees earn at least the higher of the National Minimum Wage (NMW) applicable to them, or the wage specified by a wage regulating measure (e.g. a sectoral determination), if applicable.
During this time of crisis, more employers than ever are availing of the ETI scheme to help their finances. It is important to get it right, because the penalties can be steep.
You should only enable ETI for employees if you are sure they meet the higher of your sector’s wage regulating measure or the NMW. If your employees are working fewer hours than normal, but still meet the requirement per hour, it’s fine to claim ETI. If they are now earning less per hour than the minimum wage, ETI should not be claimed. Alternatively, if there is a single minimum wage applicable to all your employees, entering it under ETI settings will enable the system to automatically calculate 0 ETI for employees who do not qualify.
If you have not yet done so, you can update your ETI settings as described in this this section of our ETI help article. You can also find more on the COVID-19 ETI in this help article.
Please note that May’s payslips need to be unfinalised in order to effect the minimum wage change for May (if you had not already done so). We generally do not recommend unfinalising payslips as this can cause significant variances if regular items have been changed. Therefore, it is recommended that you take caution when doing this – ensure that you have saved a copy of all payslips, as well as the transaction history report for the period before unfinalising the payslips. You will then need to reconcile your new finalised payslips against the saved payslips used to pay employees.
It is important to note that there were minimum wage changes on 1 March 2020, as mentioned in this blog post.
If you have successfully applied for exemption from the NMW, and also do not have a minimum specified by a wage regulating measure, a minimum wage of R2000 per month could previously be used. However, effective 1 May 2020 to 31 July 2020, such employers no longer qualify for ETI at all.