1. DOMESTIC WORKER SECTORAL DETERMINATION ECC REPORT

2. INTRODUCTION Domestic workers represent a particular vulnerable group of workers DOL interventions are therefore necessary and appropriate. The interventions needed to achieve the following outcomes -Addressing the most urgent needs -Improving the livelihoods of those worst off -Retention of jobs -Recognising the value of domestic work in society

3. Considerations Report of Department of Labour. Subsequent representations. Additional research information obtained on areas of focus such as demarcation to present wage levels

4. Representations Received 138 written representations grouped as follows: Proposals on conditions of employment Proposals on demarcation Proposals indicating that the wages are too high Proposals indicating that wages are too low Proposals indicating that wages are fair Proposals on tax incentives General comments and proposals on the content of the report

5. Focus Areas 1. Conditions of employment 2. Scope & Demarcation 3. Minimum Wages 4. Criteria

6. Conditions of employment Agreed with DOL that conditions should be in line with BCEA Proposed variations in the following areas - Overtime - Night Work - Accommodation - Record keeping

7. Overtime Implementation of flat rate system too complex Extension of 15 hour overtime per week – fine on condition that it is reflected on pay slip

8. Night Work Representation: Standby allowance higher – R20 – R30 per night Word ‘sleep-in changed to standby. Term sleep-in usually refers to domestic workers who sleep on premises Support for notion to provide for standby on condition that: Number of standby incidents is limited to avoid exploitation Allowance increased to R20 per night (Equal to 3 hours overtime) First 3 hours of physical work unpaid

9. Accomodation Highly debated issue – majority of submissions felt 25% deduction was too high Commission agreed that 25% deduction was disproportionately high Poor people do not spend such high % on housing Recommended 10%

10. Record Keeping Representations raised concerns around feasibility of keeping attendance register. Initially recommended implementation of an attendance register. Decision reviewed and payslip introduced as means to regulate attendance

11. Demarcation Representation classified into two categories: In favour of DOL proposal 1. Method of town classification 2. Non-consideration of factors such as unemployment, standard of living etc. 3. Location should be a deciding factor Not in favour of DOL proposal

12. Demarcation (2) Commission requested NDB to revisit approach Explore the average household income in particular geographical areas Acknowledge that a simple urban/rural distinction is not an accurate reflection of overall living standards Used Census 1996 data to determine average household income

13. Demarcation (3) Determined 3 bands Area A Area B Area C R24 000 + Per annum = 52 % households R18 000 + R24 000 Per annum = 12 % households Less than R18 000 Per annum = 36 % households Process for arriving at bands - arbitrary

14. Demarcation (4) Agreed single minimum wage is the ultimate goal This will be achieved in time Reduced areas to 2 - Since area B represents only 12% of sample households & the gap between area B and C is relatively small - The high wage differentials between A & B not morally justifiable

15. Minimum Wages Representation – Wages are too high Mainly from pensioners who receive grants Objected to 7% increase on the basis that government refused to give such increases to own employees Criteria such as skills and qualifications should play a role. If payment in kind is not included employers might cut down on extras such as food. Warned about job losses

16. Minimum Wages (2) Representation – Wages are too low Majority of representations from workers and their organisations Main argument centered around the value of domestic work Argued against wage differentials because the cost of living is the same everywhere Proposal did little to improve social recognition DOL analysis seen to take into account the employers differential Wealth and not that of DW. Majority suggested wages between R800 –R1200 p.m.

17. Wages (3) Other proposals Increases: 10% + cost of living adjustment each year Payment method: - Hourly rate welcomed Higher rate for part-timers Dismissal without exhausting the possibility of reduction of hours – legal offence

18. Tax incentive All the submissions received were from employers Tax rebate suggested which will improve compliance Stressed – unfair not to allow a “defenceless” individual taxpayer to treat labour cost as an expense whilst businesses are allowed to do so.

19. Commission’s Views on wages 4 broad concerns listed Calculations from which DOL recommendations are derived are based on monthly amounts, while proposals set wages on an hourly basis Calculations assume implicitly a 45 hour week Evidence suggest that Domestic Worker works shorter hours

20. Commission’s Views on wages (2) Calculations include earnings of Domestic workers employed on farms - Domestic workers on farms earn a lower wage – downwards pressure - 6% difference on rates DOL report does not propose a diffrential wage for part timers which is norm in other sectors: temporary & casual workers earn a premium due to uncertainty of income OHS Data suggest that Domestic Workers earn a premium for shorter hours. The data presented in report relate to 2000 whereas the determination wiould only be applicable in 2002.

21. ECC’s Final Wage Proposal Workers to be paid hourly AREA AAREA B HOURLY RATER 4,51 <27 hours per week R 4.10 > 27 hours per week AREA AAREA B HOURLY RATER 3.66 <27 hours per week R 3.33 > 27 hours per week

22. Increase - 3 years - 8% per year - Conditional: CPIX 10+ Wage increase to be adjusted to match CPIX rate - CPIX rate 6 weeks before 1/11

23. Payment in kind No deductions allowed Every Domestic worker should earn at least minimum wage irrespective of where he/she works or how many hours he/she works

24. Criteria - Wages are too low and Domestic workers will not be able to meet the needs of their families and themselves - DOL predictions regarding disemployment effect questioned - Low wages will exert downward pressure on wages - Poverty cut-off low (R391 per household) - DOL failed to consider the gender dimensions to poverty Representations

25. ECC views Report’s simulation in respect of disemployment effect needed to be treated with caution Domestic work is part of the informal sector – supply & demand forces could be different Uncomfortable to recommend wages below old age pension levels Inflation lower at time of report