Pastel Payroll – Basic
Conditions of Employment Act
The BCEA states that, for employees earning overtime, commission and other variable types of income, such extra income must be taken into account when they go on annual leave. This is paid over and above what they would normally receive.
The system calculates this additional rate by averaging these payments over 3 months. The rate is displayed on the “Leave” tab.
Any annual leave days recorded on the leave tab will cause an additional payment to be made, using this rate.
When creating your own custom income types, be sure to tick the “Affects BCEA” box if you want such income to influence this rate.
The BCEA aims to achieve a situation where leave pay is fully representative of individual employees’ actual earnings. The calculations have to take into account variable income types and must be based on the average earnings of each employee over the 13 weeks preceding the date upon which leave becomes effective.
The earnings threshold published in terms of the Basic Conditions of Employment Act (BCEA) is currently R205,433.30 per annum (as at the time of writing this article in 2016).
Employees who earn below this threshold amount are entitled to the protection of the working hour provisions of the BCEA.
The amendments to the Labour Relations Act, which took effect on 1 January 2015, extend protection to employees engaged in a typical form of employment (namely employees employed in terms of the fixed term or part-time contracts of employment and employees provided to clients by labour brokers) who earn below the earnings threshold.
The annual earnings threshold is applied to the Basic Conditions of Employment Act to determine whether certain provisions in the Act should be applied to a specific employee’s circumstances. Any employee earning above this annual earnings threshold will be excluded from the following sections in the Act:
- Ordinary hours of work
- Compressed working week
- Averaging of hours of work
- Meal intervals
- Daily and weekly rest period
- Pay for work on Sundays
- Night work
– that deals with transport and night shift allowances
- Public holidays
– that deals with payment for work on a public holiday that falls on a day on which the employee would ordinarily not have worked