New law for SA restaurant owners: All staff must get bonuses, weekly payments to wash clothes and more

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As part of a new collective agreement by the newly formed Bargaining Council for the Fast Food, Restaurant, Catering and Allied Trades, South African restaurant owners have been slapped with a costly set of new rules.

Signed into law by Labour Minister Thulas Nxesi, the collective agreement applies to almost all employers in the restaurant and food-related sector. Some of the new regulations include mandatory wage hikes, December bonuses and weekly payments to staff for cleaning their uniforms.

The new law came into effect on Monday 18 January 2021 and employers will have until 18 February to register with the bargaining council while beginning to comply with the new guidelines as from this month. 

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As per the new requirements, all restaurants and fast-food outlets must pay wages that exceed the national minimum wage by at least 7% (by 1 May 2021). Employers must increase wages by inflation (CPI) plus 1.5% in future, and will not be able to reduce the salary of staff who have been paid higher-than-prescribed rates.

The new regulations were met with outrage from many employers in the industry and a legal battle has been launched by The Federated Hospitality Association of South Africa (Fedhasa) to challenge the new laws. 

The new regulations imposed on restaurants and fast-food outlet owners include:

  • A bargaining council expense levy (paid to the council): Every month, the company must pay R5 per employee. Each employee must also pay R5. 
  • Dispute resolution levy (paid to the council): Every month, the company must pay R3 per month per employee. Each employee must also pay R3.
  • General establishment levy (paid to the council): R25.00 per month per establishment
  • Funeral benefit: The company must pay R12.50 per month per employee, and the employee must also pay R12.50 per month.
  • Provident fund: The company must contribute 5% of the employee’s monthly wages, while the employee must contribute another 5%.
  • Uniform: R17.50 per week payable to each employee if they are required to wash their own uniforms.

The new law comes as South Africa’s restaurant industry continues to reel from the aftermath of the Covid-19 pandemic, with the industry receiving little to no support from the government.

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