Employment laws in South Africa

When hiring employees in South Africa, it is crucial to understand the country’s key employment regulations. South Africa has a detailed labor framework that outlines specific obligations for businesses hiring locally. These requirements encompass a wide range of topics, including employment contracts, employee rights, and workplace conditions.

Hiring through an Employer of Record (EOR) may help companies manage local compliance more efficiently. Payoneer Workforce Management enables businesses to onboard employees in South Africa without establishing a local entity, simplifying payroll, benefits, and more with compliance support as per employment laws in South Africa.

This guide walks through key labor laws in South Africa, covering contracts, termination rules, working hours, and employee rights.

Key labor laws in South Africa

South Africa has several key pieces of legislation that govern employment relationships. These labor laws in South Africa provide the structure for fair employment practices and protect the rights of both employers and employees.

Here are some of the most important labor regulations:

• Basic Conditions of Employment Act (BCEA): Defines minimum standards for employment, including leave, working hours, and termination.
• Labour Relations Act (LRA): Regulates union activity, dispute resolution, and protections against unfair dismissal.
• Employment Equity Act (EEA): Promotes workplace equality and prohibits discrimination.
• Occupational Health and Safety Act: Covers workplace safety and employer responsibilities.
• Unemployment Insurance Act: Outlines employee and employer contributions to the Unemployment Insurance Fund.

These laws are foundational for companies operating and hiring in South Africa and must be factored into all aspects of employment.

Types of contracts

In South Africa, employers can choose from several contract types depending on the nature of the employment. Understanding the differences is important when structuring a compliant employment agreement. 

Here are the main types of employment contracts in South Africa:

• Permanent employment: Ongoing roles with no end date; includes full access to benefits and statutory protections
• Fixed-term contracts: For temporary or project-based work, must specify a clear end date or completion milestone
• Part-time employment: Fewer hours than a full-time role, with benefits generally adjusted on a pro-rata basis
• Casual employment: Short-term or irregular work, typically used in retail, hospitality, or seasonal environments

Classifying workers in South Africa correctly ensures employees receive the benefits they’re entitled to and helps reduce potential misclassification risks.

Essential contract elements

Employment contracts must contain specific elements to be legally valid and to comply with local employment laws in South Africa. A clear and detailed contract supports better working relationships and protects both parties.

Key contract elements include:

• Job title and detailed job description
• Compensation in South African rand (abbreviated as ZAR or R), including any additional allowances or bonuses
• Information about retirement contributions, if applicable
• Working hours in South Africa, including standard hours and any conditions for overtime
• Paid leave entitlements, including vacation, sick leave, and family responsibility leave
• Terms of employment, including duration and termination provisions

Employers must present contracts in writing and review them with new hires to promote clarity and legal compliance.

Minimum wage in South Africa

The national minimum wage in South Africa is ZAR 27.58 per hour. 

This applies across most sectors, although specific industries like domestic work and agriculture may follow slightly different thresholds.

Overtime is also regulated by labor laws in South Africa for employees earning below R241,110.59/year.

• Overtime pay is calculated at 1.5 times the regular rate for weekdays
• Double pay applies for Sundays and public holidays
• Employees cannot be required to work more than 10 hours per week

Employers may be required to accurately track working hours in South Africa so that overtime is recorded and compensated correctly.

Working hours in South Africa

Working hours in South Africa are defined by the Basic Conditions of Employment Act. Employers must structure employee schedules in line with these requirements.

Standard working conditions include:

• A maximum of 45 hours per week, typically 9 hours per day over 5 days
• Overtime begins after 45 hours per week and is limited to 10 hours per week
• Employees must receive at least 1 rest day per week, usually on Sunday
• There must be a minimum rest period of 12 hours between work shifts

When setting working hours, it is also important to factor in leave entitlements. Employees in South Africa are entitled to 15 days of paid time off each year, as well as 12 paid public holidays. 

Planning around these leave periods helps businesses avoid scheduling conflicts, maintain compliance with local labor laws, and ensure that employees receive the rest time they are legally owed.

Learn more about the leave policy in South Africa.

Understanding the structure of working hours in South Africa is crucial for creating compliant schedules, promoting employee well-being, and effectively managing workforce availability.

Mandatory benefits

South African law outlines several benefits that the employer must either provide directly or through statutory contributions.

These include:

• 15 days of paid time off
• Sick leave of up to 6 weeks in a 36-month cycle
• 3 days of family responsibility leave annually
• 4 consecutive months of maternity leave, typically unpaid unless covered by company policy or the Unemployment Insurance Fund (UIF)
• 3 days of paternity leave
• Contributions to the UIF at 1% of earnings from both the employer and employee
• Overtime pay 
• Compensation for workplace injuries or illness through the Compensation for Occupational Injuries and Diseases Act (COIDA)

These benefits form part of the employment package and must be factored into your budget when hiring in South Africa.

Learn more about mandatory taxes, contributions, and payroll in South Africa.

Termination

South African labor law outlines specific procedures and requirements for terminating an employment contract. Employers must follow a structured process to avoid claims of unfair dismissal.

There are several recognized grounds for dismissal, including:

• Misconduct: This includes serious violations such as theft, insubordination, or repeated breaches of company policies.
• Poor performance: If an employee is unable to meet the required standards of the job despite appropriate training and support.

If an employee is made redundant, they are entitled to severance pay equal to a week’s pay for each completed year of service, in addition to any notice pay or accrued leave.

Notice periods must also be observed as follows:

• 1 week’s notice for employees with less than 6 months of service
• 2 weeks’ notice for those employed for between 6 and 12 months
• 4 weeks’ notice for employees with more than 1 year of service

Dismissals must follow a fair procedure.

Termination practices that do not meet these requirements may be considered unlawful.

Other employee rights and protections

Employees in South Africa may benefit from several legal protections that promote fairness and safety in the workplace. These rights may apply across industries and job roles.

Key protections include:

• Anti-discrimination: Employees are typically protected against discrimination based on race, gender, religion, disability, and other factors.
• Equal treatment: Equal pay for work of equal value may be upheld regardless of gender or background.
• Protection from harassment: Employers must take steps to prevent harassment, including sexual harassment, and investigate any reports.
• Protection against unfair dismissal: Employees cannot be dismissed without cause and due process. Dismissals must follow fair procedures and be based on justifiable reasons.

These protections are part of broader employment laws in South Africa and may have to be reflected in workplace policies and practices.

Navigate employment laws in South Africa with trusted support

Understanding and applying employment laws in South Africa involves careful attention to regulations across contracts, wages, benefits, and terminations. For international companies hiring employees in South Africa, staying current with changing legislation and managing local HR tasks can be time-consuming and complex.

Payoneer Workforce Management provides a streamlined approach to managing local teams without setting up a local entity. 

As a trusted EOR partner, we help businesses onboard employees in South Africa, assisting with managing employment obligations such as payroll, benefits, and legal documentation.

Book a demo today!

FAQs

1) What are the rights of employees in South Africa?

Employees in South Africa are typically entitled to fair wages, leave entitlements, a safe work environment, protection from discrimination, and harassment.

2) What are the working hours in South Africa?

The standard working hours in South Africa are up to 45 hours per week. Employees can be required to work up to 10 hours of overtime per week, with consent. Employees are also entitled to 15 days of annual leave and 12 public holidays.