National minimum wage bill 2018 – New Learnership allowances
The National Minimum Wage Act 9 of 2018 (NMWA) came into effect on 1 January 2019. Schedule 2 section 6(6) in the new national minimum wage bill refers to the new minimum stipends structure per learnership category. As this new legislation increases the cost of running learnerships based on number of credits and NQF levels, organizations that run unemployed learnerships for BEE purposes has to realize the increasing financial impact this new legislation has on the business, cost of running the learning program and implementing the skills development strategy.
Every worker or learner will be entitled to payment of a wage not less than the national minimum wage as stipulated in the Act. The payment of the national minimum wage cannot be waived and overrides any contrary provision in a contract, collective agreement, sectoral determination or law. This means that any current learnership agreement will have to be amended to include the new minimum stipend allowance as stipulated below.
Companies typically pay for the learnership cost to the training provider and in addition also have to pay the learners monthly stipend amounts as per the skills development act.
The new legislation has an impact on the increase cost of the stipend amount paid to learners weekly and monthly. As a learner increases the NQF level of the course combined with the amount of credits already earned by the learner, the minimum stipend amounts goes up per month. This increased cost will have huge financial implication for the business if they train learners who have already obtained credits though a formal institutions. It is not so much the NQF level of the course that matters, but rather if the person has obtained pervious credits through other training courses.
It will be very important to get the credits already earned by the learner in order to determine if the stipend amount is correctly paid. This will add to the current challenge of learnership implementation and cost outcome of the learnership program. However, with the 12H tax allowance it will still make it attractive for companies to run learnerships at the end of the day.
Learnership allowances are as follows:
Minimum allowance per week and month
Credits already earned by learner
Minimum allowance per week
Minimum allowance per month
Levels 1 to 2
Levels 5 to 8