Minimum wages and conditions of employment for domestic workers

1
Minimum wages and conditions of employment for
domestic workers

• Results of investigation by
• Department of Labour

2
Agenda

• Background
• Nature of domestic work
• Conditions of employment
• Minimum wages
• Conclusion

3
Background

• History of legal protection
• Terms of reference
• Process to date
• Process from here
• Report contents

4
History of legal protection

• 1994 Very limited legal protection
• 1996 Labour Relations Act extended to domestic
  workers
• 1998 Basic Conditions of Employment Act extended
  
• 1999 Minister announces intention to set minimum
  wages and conditions appropriate to the
  circumstances facing domestic workers
• 2000 Skills Development Act includes domestics
• 2001 UI Bill to include domestics.

5
Terms of reference of investigation

• To investigate
• Minimum rates of remuneration
• Conditions of employment
• And who should be covered by the term domestic
  worker.

6
Process to date

• Consultation and comments
• 117 public comments
• 64 public hearings
• Research
• 2 surveys reaching 300 employers and 4000
  domestic workers
• Review of international experience

7
Process from here

• Report published for further public comment
• Comments to be considered by the Employment
  Conditions Commission (ECC)
• ECC to consider report and public comments and
  advise Minister
• Minister to publish Sectoral Determination.

8
Report contents

• Report covers the following
• Background
• Historical perspective and description of sector
• Defining domestic work
• Present conditions
• Present wages
• Evaluation of the potential impact of certain
  wages on poverty and job creation
• Recommendations.

9
Nature of domestic work

• Historical perspective
• What is a domestic worker
• Types of domestic work
• Facts and figures
• Features of domestic work

10
Historical perspective

• In Western World, domestic work was a
  respectable occupation until industrial
  revolution.
• In 19th and 20th Century seen as occupation with
  low status, left to poorer or specific ethnic
  groups and undervalued.
• Enabled men to work outside the home unhindered.

11
And in South Africa

• White women were given preferential treatment in
  labour market
• Black women were unskilled and due to apartheid
  were able to be paid very low wages.
• Domestic work in SA is particularly lowly paid
  and undervalued.
• Today their position has not improved.

12
What is a domestic worker

• International Labour Organisation definition has
  following components
• Working in a private household
• Employed by one or several employers
• Employer receives no pecuniary gain from this
  work
• Remunerated in different forms (cash and kind).

13
Types of domestic work

• Housekeeping
• Cooking
• Child care (and sometimes care of the aged)
• Watch person
• Gardener
• Chauffeur
• Cleaner.

14
Facts and figures

• Are approximately 800 000 domestic workers
• 18 of workers employed are domestic workers
• Vast majority are black women
• Majority have primary education
• Average age is 41
• Majority come from rural areas.

15
Features of domestic work

• Highly individualised employment relationship
• High levels of control
• Regimented life style
• Lack of privacy
• High levels of job insecurity
• Unequal power relations
• Intensity of work
• Poor working conditions.

16
Conditions of employment

• General comments
• Working hours
• Leave
• Termination of employment
• Administrative obligations
• Accommodation
• Social security

17
General comments

• Lack of awareness by employers and domestic
  workers on rights and obligations
• Legislation seldom consulted
• Informal arrangements made which are not recorded
• More complaints about isolation, lack of job
  security than about conditions of employment

18
Working hours

• National average 46.2 hours per week
• KwaZuluNatal 55.9 hours per week
• Often work in evenings and nights including being
  asked to look after child or old throughout the
  night
• Live ins can be called upon at all hours
• Difficult to control and monitor numbers of hours
  worked
• Not excessive overtime worked but overtime not
  remunerated.

19
Working hours recommendations

• 45 ordinary hours per week to remain
• Can work up to 15 hours overtime per week
• Overtime to be remunerated at one sixth of salary
  for every 5 hours worked.
• Allowance of R16 per shift to be paid for
  sleeping in at night and employee must agree in
  writing. This arrangement can be for no more than
  5 times per month or 50 times per year.

20
Leave

• Most get between 14 and 21 days leave. The law
  stipulates 21 days.
• Complaints about amount of pay received when on
  leave
• Sick leave arranged informally
• Requests for more family responsibility leave
• Worker asked to arrange a replacement when going
  on maternity leave.

21
Leave recommendations

• Family responsibility leave to be increased from
  three days in BCEA to five days for domestic
  workers.

22
Termination of employment

• Present law requires four weeks notice
• Employers called for
• Shorter notice periods
• Probation periods
• Ignorance and uncertainty in respect of severance
  pay when retrenchments occur.

23
Termination of employment recommendations

• Proposed amendments to BCEA would also cover
  domestic workers, namely
• Reduced notice periods to
• One week if been employed for six months or less
• Two weeks if employed for less than one year
• Four weeks if employed for more than six months
• A form of probation.
• Code of Good Practice to be developed to provide
  guidelines in respect of what to do on
  termination including in respect of severance
  pay.

24
Administrative obligations

• BCEA excludes domestic workers from getting pay
  slips.
• Workers complained about difficulties e.g. to
  open a bank account
• Employers said they would not have a problem to
  do so
• Deductions provisions of BCEA difficult to apply.
• Very few employers sign contracts of employment
  or issue written particulars.

25
Administrative obligations recommendations

• Domestic workers must get a pay slip or wage
  envelope.
• Employers must keep attendance registers unless
  an agreement has been concluded otherwise.
• No employer shall penalise domestic workers for
  any damages that may occur during performance of
  duties. If believe there has been willful
  damage, can declare a dispute and use LRA
  remedies.

26
Accommodation

• Not as many complaints about quality of
  accommodation as about
• Isolation (lonely, no friends on premises)
• Lack of privacy (being called upon on all hours)
• 36 of domestic workers in survey said that they
  lived on employers property
• 1 2 said employers made deductions for
  accommodation, electricity, water, food etc.

27
Accommodation recommendations

• An employer may deduct not more than 25 of the
  wage in respect of accommodation which meets
  certain standards
• A domestic worker can not work more than 10 hours
  in a week without remuneration in exchange for
  accommodation
• No deductions allowed for food.

28
Standard of accommodation

• Room must be weatherproof and generally kept in a
  good condition
• At least one window and door, which can be locked
• Room must be fitted with a toilet, bath or shower
  if domestic worker does not have 24 hour access
  to another bathroom.

29
Social security

• Workers in hearings expressed support for
  inclusion in UI and also want a provident fund.
• Employers concerned about the administration and
  collection of monies.
• Report recommends that the issue of a provident
  fund be taken up by the same forum that is
  looking at the inclusion of UI for domestic
  workers.

30
Minimum wages

• Information gathering
• Present wages
• Expectations
• Modeling exercise
• Approach
• Recommendations

31
Information gathering

• Difficulties to get accurate information
• Used information from OHS, surveys, hearings
• Most useful data from October Household Survey
  1995
• Rates inflated by CPI to calculate 2000 levels
• Use median wages rather than mean since this is
  most accurate reflection of wages of majority of
  workers.

32
Present wages (OHS)

• Per rural or urban
• Urban R588 per month, Rural R409 per month
• Per race
• White R1023 per month, African R518 per month
• Per gender
• Female R514, Male R588.
• Per educational level
• None R398, Grade 9 11 R588

33
Present wages per province (OHS)

• Gauteng R750 per month
• Western Cape, Mpumalanga, KwaZuluNatal Northern
  Province R588
• Eastern Cape and Northern Cape R409
• North West R355
• Free State R273

34
Other information from surveys

• Within Gauteng
• Johannesburg R833 per month
• Pretoria R674 per month
• Vaal R438 per month.
• Live-ins earn more than live outs but work on
  average 19 more hours per week.
• Value of accommodation R200 per month.

35
Wages of domestic workers compared to other
workers

• A domestic worker earns
• 7 of what a manager earns
• 19 of what a clerk earns
• 43 of what a mine worker earns
• 93 of what a farm worker earns.
• Domestics are the lowest paid workers in our
  society.

36
Expectations

• Employees in the hearings
• Rural workers R400
• Urban workers R800
• Employers in the hearings
• Full time workers between R160 and R900
• Part time workers between R20 and R60 per day

37
BCEA requirements

• Need to look at impact of minimum wages on
• Ability of employer to pay
• Poverty alleviation
• Employment retention and employment creation
• Small business
• Health, safety and welfare of employees.

38
Approach of Department

• Protect the jobs of the most vulnerable
• Job loss would impact on entire household
• Employment is scarce for people with few skills,
  particularly in rural areas
• Improve the livelihoods and contribute to the
  alleviation of poverty
• Minimum wage and condition setting only one
  mechanism amongst others to improve conditions

39
Establishing impact on jobs and poverty
alleviation

• Investigation
• Looked at number of workers that COULD be
  affected by setting the minimum wages at
  different levels
• Did a econometric modeling exercise to determine
  POSSIBLE impact of certain wages on employment.
• Number of weaknesses with modeling
• Used the results to GUIDE our decisions.

40
Establishing number of workers who could be
affected

• Number of rural workers earning less than R400
  per month is
• 187 595 or 45 of all rural domestic workers.
• Numbers of urban workers earning under R500 per
  month is
• 112 494 or 38
• Number of urban workers earning under R600 per
  month is 159 872 or 53.

41
Results of modeling exercise

• Model assumed that for every 1 increase in
  wages, there would be a 0.15 impact in the short
  run and 0,7 in the long run on jobs.
• A R400 minimum wage for rural workers could
  result in the following job losses
• 6 or 24 000 workers in the short run
• 26 or 100 000 workers in the long run
• A R600 minimum wage for urban workers could
  result in the following job losses
• 5 or 15 000 workers in the short run
• 23 or 69 000 employees in the long run

42
Comments on modeling exercise

• Drawbacks include
• Static exercise
• No indirect effects of wage increases considered
• Elasticities developed from the formal sector.
• Determining affordability is difficult since
  households cant close down.
• Employers may not respond by dismissing workers
  but by changing employment patterns.

43
Conclusions

• High minimum wages poses a serious risk of
  significant job losses, especially in rural areas
• Need to consider this in the context of
• Job scarcity, particularly in rural areas
• Characteristics of domestic workers low skills
• Household dimension domestic workers support
  others in households.
• Modest and realistic minimum wages would minimise
  job losses and improve livelihoods.

44
Recommendations

• Modest but realistic minimum wages should be
  proposed for different geographical areas
• R600 for urban areas
• R500 for rural/urban
• R400 for rural
• Wages should also be proposed on an hourly basis
  so that employers can determine the number of
  hours that they can afford.

45
Geographical areas

• Based on metropolitan and local council
  boundaries
• Divided into
• Urban e.g. Durban, Johannesburg, Kimberley
• Urban/rural e.g.Vryheid, Ventersdorp, Phalaborwa
• Rural areas
• Comments on the appropriate demarcation are
  welcomed.

46
More recommendations

• Wages should increase by 7 after the first year
  and a further 7 after the second year
• Wages can be reduced by 25 if accommodation of a
  reasonable standard is provided.

47
Conclusion

• It is a process to improve conditions for
  vulnerable workers.
• Aspects of this process include
• Establishing the appropriate regulatory
  environment
• Improving skills
• Improved enforcement
• Poverty alleviation and social development
  strategies of government as a whole.
• We are on course.