12th September 2018 at 1:48 pm #67800
Yesterday I attended the Cape Town session of the excellent SALLR seminar, presented by Brian van Zyl. As part of the labour law update on forthcoming legislation, one of the slides presented on the National Minimum Wage (NMW) Bill, included the allowances for learners on Learnerships.
The Bill was passed in May – but is not yet implemented.
There has been significant media coverage on the minimum wage at R20 per hour, with R18 for agricultural workers, R15 for domestic workers, and R11 for Expanded Public Works Programmes. However, I have not seen anything in the media on the rates for learners on Learnerships.
The rates are covered in Schedule 2 of the NMW Bill, and increase according to the NQF level of the qualification, and the credits achieved. This would seem to have quite a few implications for those employers implementing the more senior Learnerships, and those Learnerships that are more than a year long – such as apprenticeships.
Remember that apprenticeships are included in the definition of a Learnership.
In order to implement the increases, the employer would need to keep up with the formative assessments, and match the credits achieved with the correct wage rate. It would seem that this would mainly tend to affect 18(2) previously employed learners, but employers would need to ensure that their existing employees on Learnerships were also being correctly paid.
The complexity of Learnership implementation would definitely increase – an already time-consuming bureaucratic exercise for employers – but the really critical question is whether this would reduce motivation of employers to increase employment, and particularly increase employment of young people.
The shocking percentage of youth under 25 who are now unemployed – including those who have simply given up looking – is now 67.4%. That is an astonishing waste of our national potential.
Now do the other incentives balance the financial calculation? There is the Employment Tax Incentive – aimed at increasing youth employment; there is the learnership tax allowance at start and successful completion of Learnerships; there is the YES initiative, and B-BBEE scorecard skills development element; and potential SETA discretionary grant funding.
So my questions:
Are Training providers and SDFs aware of the NMW Bill – and the learner wage rates while on Learnerships?
Are providers ready to implement formative assessments that align with the credit levels in order to advise employers that an increase is required for the learners?
Are employers factoring in these calculations in their budgeting?
Or will this simply be very easy to do – and I am over-thinking it – and making too much of it all?
Really interested to have your thoughts and comments.
The schedule of NQF level, credits achieved, and wage rates is attached.
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12th September 2018 at 2:36 pm #67802
Thank you for this Sylvia, my question is, will the SETA’s increase the stipend allowance they give for a funded learnership? For instance, Construction Seta gives R1500 towards the learner stipend for an NQF 3 qualification, and if you consider the new minimum wage, this is too little?
I wonder if the employer will have to pay the difference. If it is a self-funded Learnership the employer will be able to factor the wage into their budgeting. However, what happens if a Learnership already commenced before the NMW rate is implemented, will they have to amend the stipend accordingly?
AND are the SETA’s even aware of the NMW Bill?
12th September 2018 at 7:14 pm #67805
Thank you Nadia – yes all valid questions.
I have not seen any document indicating that the SETAs would pick up the difference in the stipend allowances.
You are correct about timing – that could potentially be an issue. My understanding is that the rates would become effective backdated to 1 May 2018. So SETAs would be constrained by their agreed budgets. Employers equally would have calculations to work through first to decide upon backdated allowances, and then manage the cost.
It would be beneficial to have clarification from DHET on how it would be handled.
13th September 2018 at 8:47 am #67809
Thank you for this information, Sylvia. To us it is of only academic value because we use it to review and update our course manuals, but we are not interested in Leanerships or claiming back skills levies even though we pay our monthly dues. The frustration and other obstacles are simply not worth the trouble. I will study the new NMW Bill because I happened to be reviewing our SDF course material at the moment. Will provide feedback if I come across something wroth discussing.
13th September 2018 at 9:38 am #67811
Since employers must treat learners as employees fort he duration of the learnership and must ensure all LRA and BCEA requirements are adhered to I am of the opinion that the requirements of the NMW bill must similarly be met. In the event the seta does not offer sufficient funding to meet the minimum wage then the employer would have to make up the difference. To my way of thinking, linking the wage to the credits is going to cause problems and will I feel once again negatively impact the learner who may be held back in terms of assessments just to keep the credit levels down.
13th September 2018 at 10:35 am #67813
Thank you Hannes and Des,
That is something I had not considered Des – will there be a reluctance – or some delay – to conduct the formative assessment and inhibit progress – or the final summative assessment and integrated final summative assessment.
What I don’t know – for the longer Learnership programmes over a few years – is how the credit levels will match up with modules of the training.
13th September 2018 at 4:14 pm #67822
14th September 2018 at 8:50 pm #67837
The learnership stipend is not a salary but its intention is to cover learner’s expenses such as travel and meals. Clause 5 of the NMWB states that the Minimum Wage “does not include the payment of allowances such
as transport, tool, food or accommodation allowances, payments in
kind (board or lodging), tips, bonuses and gifts”
It is thus my understanding that learners are to receive the minimum wage (from employers), in addition to the stipend from the SETA.
This Bill as I understand it applies to employers, and not funders i.e. SETAs.
16th September 2018 at 10:21 am #67841
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