The 2025 BCEA Earnings Threshold: What Every Employer Needs to Know
As of 1 April 2025, the Department of Employment and Labour has officially increased the annual earnings threshold under the Basic Conditions of Employment Act (BCEA) to R261,748.45. This change carries significant implications for both employers and employees, especially in determining who qualifies for specific protections under the BCEA, Labour Relations Act (LRA), and Employment Equity Act (EEA).
Who Is Affected by the Threshold Adjustment?
The earnings threshold is a crucial dividing line: it determines which employees qualify for certain statutory employment protections. Those earning below the threshold continue to benefit from all core conditions of employment, including limitations on working hours, mandatory rest periods, and entitlement to overtime pay. In contrast, employees earning above the threshold may be excluded from some of these protections—unless such benefits are explicitly provided for in their contracts of employment.
This delineation affects a wide spectrum of workforce management practices, from contract drafting to payroll structuring.
Practical Implications for Employers
1. Overtime Compensation
One of the most immediate consequences of the threshold increase lies in overtime regulation. Employees who earn above the threshold are no longer automatically entitled to overtime compensation. This can offer employers greater flexibility in managing senior staff or high earners, but it also creates a risk if employment contracts are silent on this issue. Without clear terms, disputes over compensation may arise.
2. Labour Broker Placements and Temporary Employment
The increase further strengthens protections for temporary or contract employees earning below the threshold. These workers, especially when supplied through labour brokers, are afforded additional legal safeguards. Employers making use of outsourced or brokered labour may now be deemed joint employers under specific conditions, increasing their responsibilities and potential liabilities.
3. Fixed-Term Contract Limitations
Another critical area affected is the use of fixed-term contracts. Employees earning below the threshold cannot be employed on such contracts for longer than three months, unless there is a justifiable reason linked to the nature of the work. Failure to provide such justification may result in forced conversion to permanent employment, along with backdated employment benefits.
Employers must now approach fixed-term employment with increased caution. Standard justifications such as seasonal work, project-based tasks, or maternity cover must be clearly documented and legally sound.
Strategic Next Steps for Employers
The revised threshold presents an opportunity—if managed correctly—to tighten compliance and align employment practices with the latest legal standards. However, it also introduces new risks for businesses that fail to proactively review their HR documentation and employment contracts.
To stay compliant:
- Audit employment contracts to determine which employees fall above or below the earnings threshold.
- Review and update HR policies to reflect changes in overtime, working hours, and contract lengths.
- Align payroll systems to ensure accurate remuneration calculations based on contractually agreed terms.
- Consult with a labour law expert to clarify grey areas and ensure your business is fully compliant with the revised legislation.
If you are uncertain about how this threshold adjustment affects your organisation, now is the time to seek professional guidance. Labour Law with Luzan offers tailored compliance checks and employment contract reviews to ensure your policies and practices remain legally sound in 2025 and beyond.
