PAYSLIPS, DEDUCTIONS & LAWFUL REMUNERATION PRACTICES

Written by Siphesihle Mthombeni

The hairdressing, cosmetology, beauty, and skincare industry is a dynamic and service-driven sector that contributes significantly to both personal care and the broader economy. While technical skills and client satisfaction are often prioritised, understanding financial aspects such as payslips, deductions, and remuneration is equally important. These elements determine how employees are compensated and whether labour practices are fair, transparent, and compliant with legislation.

In South Africa, employment conditions in this industry are governed by labour laws and the Hairdressing, Cosmetology, Skincare and Beauty Industry Bargaining Council (HCSBC) Main Collective Agreement (MCA) and its area-specific collective agreements (Areas A, B, C, and D). These frameworks are designed to protect employers, their employees, and standardise working conditions across the sector.

Payslips in the Beauty Industry

A payslip is a legal document that provides a detailed breakdown of an employee’s earnings and deductions. Employers are required to issue payslips to employees for every pay period.

A compliant payslip includes employer and employee details, gross earnings, all deductions, and net pay. In our industry, where remuneration often includes commission, payslips are essential for ensuring transparency in how income is calculated.

Accurate payslips enable employees to verify their earnings and ensure that all deductions are lawful and correctly applied.

Remuneration in the Industry

Remuneration in our industry typically consists of a basic salary combined with commission. Commission-based structures reward employees based on the services they perform, encouraging productivity and performance.

However, this structure may result in fluctuating income. To address this, South African labour law and the HCSBC Main Collective Agreement (MCA) require that employees receive at least the minimum wage, regardless of commission earnings.

The Hairdressing, Cosmetology, Beauty, and Skincare Industry Bargaining Council (HCSBC) plays a critical role in regulating wages and employment conditions within the industry. Its Main Collective Agreement (MCA) is legally binding and applies to all employers and employees in the sector, including those who are not direct members, also known as non-parties to the agreement.

Types of Deductions

Deductions are amounts subtracted from an employee’s salary before payment. These are strictly regulated to ensure fairness and legal compliance.

Statutory deductions

Statutory deductions are required by law and include Pay-As-You-Earn (PAYE) tax and Unemployment Insurance Fund (UIF) contributions. These deductions support national social security systems and are mandatory for eligible employees.

Compulsory/Mandatory industry deductions

In our industry, certain deductions are compulsory in terms of the HCSBC Main Collective Agreement (MCA). These include contributions to the sick benefit fund, sick pay fund, pension fund, council levies, and union fees.

Importantly, these deductions apply to all employees who fall within the scope of the Main Collective Agreement (MCA) and the area-specific collective agreements (Areas A, B, C, and D), regardless of whether they are union members or non-parties to the agreement. This means that agency shop fees, as provided for in the agreement, are mandatory across the sector, though distinct from full union subscriptions.

These compulsory deductions serve important purposes:

• Sick benefit fund (limited to the Western Cape and KwaZulu-Natal area, with no new members accepted as of 1 January 2019): Provides financial support during illness by means of insuring medical expenses.

• Sick pay fund: Provides financial support during periods of sick leave.

• Pension fund: Ensures long-term financial security after retirement.

• Union fees: Support collective representation and enforcement of workers’ rights within the industry.

• Council levy: Enables the administration of collective bargaining and exemption thereof, the enforcement of what has been agreed to through collective bargaining, and to resolve disputes which may arise as a result of collective bargaining, and or the employment relationship.

Employers are legally obligated to deduct and remit these contributions to the appropriate institutions through the council.

Deductions Specific To Our Industry

Due to the nature of the industry, deductions must be carefully regulated. While commission-based remuneration can affect earnings, deductions must still comply with legal requirements as well as the HCSBC Main Collective Agreement (MCA) and area-specific prescriptions (Areas A, B, C, and D).

Employers are not permitted to make arbitrary deductions for damages, losses, or product usage unless such deductions are authorised by law, a collective agreement, or the employee’s written agreement, and comply with the applicable procedural requirements and the 25% limit as outlined above. This ensures protection against unfair labour practices.

Legal Protection for Employees

The Basic Conditions of Employment Act (BCEA) sets out clear rules regarding deductions. Employers may only make deductions if they are required by law or authorised through agreement or collective bargaining arrangements.

Employers must also ensure that all deducted funds are properly paid over to the relevant bodies. Failure to do so may result in legal penalties and financial consequences.

Collective agreements in the hairdressing, cosmetology, skincare, and beauty industry, particularly the HCSBC Main Collective Agreement (MCA), strengthen these protections by standardising deductions and ensuring that employees benefit from the contributions made on their behalf.

Challenges in the Industry

Despite the existence of these protections, challenges remain. A key issue is the misunderstanding of compulsory deductions, particularly union fees, which some employers incorrectly assume are voluntary.

Additionally, income variability due to commission-based remuneration can create financial uncertainty. Non-compliance by some employers further complicates the situation and undermines the effectiveness of labour regulations.

Importance of Financial Awareness

Financial awareness is essential for employees. Understanding payslips and deductions enables employees to verify their earnings and ensure compliance with legal and industry requirements.

Awareness of compulsory deductions is crucial, as these provide important financial and social protection benefits. Employers also have a responsibility to ensure transparency and to clearly explain all payslip components to employees.

Payslips, deductions, and remuneration are fundamental aspects of employment in our industry. Payslips promote transparency, remuneration structures balance flexibility with earning potential, and deductions, particularly those mandated by collective agreements, provide essential protection.

Compulsory deductions such as sick benefit fund, sick pay fund contributions, pension funds, and union fees apply to all employees within the scope of the Main Collective Agreement (MCA), regardless of membership status. These contributions play a vital role in supporting employee welfare and ensuring long-term financial security.

Ultimately, improved awareness and compliance will contribute to a more transparent, fair and sustainable working environment for both employers and employees in the industry. This not only strengthens compliance within establishments/workplaces, but also promotes trust, accountability and professionalism across the industry as a whole.

Should you wish to obtain a draft payslip that is compliant with South African Labour Laws and the Industry Collective Agreement, please reach out to an EOHCB representative.