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Minimum Wage Within The Catering Industry

The recent economic meltdown within the global community and the slow recovery of the domestic economy have led to a sharp rise in the cost of living across the board, hitting groups in the middle to the lower the income the more difficult it is. The above continues the recent increase in Union action regarding pay and benefits included there.

For many years the catering industry has largely escaped the reach of legislation regarding labor matters such as minimum wage. However, disputes surrounding labor issues are increasing within this industry. Such disputes pose a particular risk to restaurant and catering businesses, where a large number fail within the first year of business alone due to lack of income, it adds current economic climate and the increase in Union action, the risk of failure increases dramatically.

A prominent issue that needs to be explored in relation to labor disputes of this nature is the definition of an employee. The definition is made so broadly that a person does not need an employment contract to qualify as an employee. This means that such people may be entitled to certain benefits even though they do not have a formal employment contract.

A very difficult and uncertain position has arisen in relation to the payment of the minimum wage to waiters. Waiters were initially described as “contract waiters” in terms of their job description. Recently the description has changed to “commission work”, note that the above should not be confused with the terms “independent contractor” or “causal worker”. The law seems to be open to interpretation as to what constitutes the minimum wage in this context. In essence there are two possible interpretations: the first is that a commission worker should be paid the minimum wage without any commission, that is to say the employee is paid a base and gets any commission; the second possible interpretation is that the minimum wage includes any commission which essentially means that the party in question wage is established by setting a fixed amount as the wage and then any amount earned above and above that amount consists of commission. The difference between the former and the latter is that in the former situation the party receives R x as base and keeps any commission/tips earned. Under the latter construction the party’s wages are R x and the commission is paid only on the amount earned by Rx. So if the wage is R 1200, if the party only earns R 200 in commission they will only receive R 1200 but if they earn R 2000 they will receive R 600 commission.

The last consideration under the context of the minimum wage for future restaurant owners is simply to continue paying as such for a long period of time, due to the fact that restaurants often have many changes. -or their income, it is advisable to hire a lawyer to draft employment agreements for all staff so that the contracts are adapted to best protect the financial needs of the business.

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