4       Compliance with wage regulating measures

(1)     An employer is not eligible to receive the employment tax incentive in respect of an employee in respect of a month if the wage paid to that employee in respect of that month is less than-

(a)     the higher of the amount payable by virtue of a wage regulating measure applicable to that employer or the amount contemplated in section 4(1) of the National Minimum Wage Act, 2018 (Act 9 of 2018), or Schedule 2 to that Act; or

(b)     if the amount of the wage payable to an employee by an employer is not subject to any wage regulating measure or not subject to section 3 of the National Minimum Wage Act, 2018 (Act 9 of 2018), or exempt under section 15 of that Act-

(i)      where the employee is employed and paid remuneration for at least 160 hours in a month, the amount of R2 000 in respect of a month; or

(ii)     where the employee is employed and paid remuneration for less than 160 hours in a month, an amount that bears to the amount of R2 000 the same ratio as 160 hours bears to the number of hours that the employee was employed for and paid remuneration by that employer in that month.

[Subsection (1) amended by 113(1) of Act 43 of 2014, by section 141(1) of Act 25 of 2015, by section 94(1) of Act 15 of 2016, by section 91(1)(a) of Act 17 of 2017 and by section 79(1)(a) and (b) of Act 34 of 2019 and substituted by section 3(1)(a)-(d) of Act 13 of 2020 deemed effective on 1 December, 2021 and applicable in respect of remuneration paid on or after that date]

(2)     If an employer receives the employment tax incentive in respect of an employee despite not being eligible by reason of subsection (1), that employer must pay a penalty to the South African Revenue Service in an amount equal to 100 per cent of the employment tax incentive received in respect of that employee in respect of each month that the employer received the employment tax incentive.

(3)     For the purposes of this section “wage regulating measure” means—

(a)     a collective agreement as contemplated in section 23 of the Labour Relations Act;

(b)     a sectoral determination as contemplated in section 51 of the Basic Conditions of Employment Act, 1997 (Act 75 of 1997); or

(c)     a binding bargaining council agreement as contemplated in section 31 of the Labour Relations Act, including where such agreement is extended by reason of a determination of the Minister of Labour in terms of section 32 of that Act.

(4)     For the purposes of this section, “hours” means “ordinary hours” as defined in section 1 of the Basic Conditions of Employment Act, 1997 (Act 75 of 1997).

[Subsection (4) added by section 91(1)(b) of Act 17 of 2017 effective on 1 March, 2018]