Minimum wages and conditions of employment for domestic workers Results of investigation by Department of Labour

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

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

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.

Terms of reference of investigation To investigate: Minimum rates of remuneration Conditions of employment And who should be covered by the term “domestic worker”.

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

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.

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.

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

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.

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.

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).

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

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.

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.

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

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

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 in’s” can be called upon at all hours Difficult to control and monitor numbers of hours worked Not excessive overtime worked but overtime not remunerated.

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.

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.

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

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.

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.

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.

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.

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 employer’s property 1 – 2% said employers made deductions for accommodation, electricity, water, food etc.

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.

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.

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.

Minimum wages Information gathering Present wages Expectations Modeling exercise Approach Recommendations

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.

Present wages (OHS) Per rural or urban: Per race: Per gender 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

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

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.

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.

Expectations Employees in the hearings: Employers 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

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.

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

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.

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%.

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

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 can’t ‘close down’. Employers may not respond by dismissing workers but by changing employment patterns.

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.

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.

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.

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.

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.