In the vibrant and competitive world of hairdressing, cosmetology, and beauty in South Africa, many professionals work under commission-based agreements. This payment structure, where earnings are tied to the amount of business generated, can be highly motivating and financially rewarding. However, it is crucial to understand that employees working on commission are still entitled to the national minimum wage as stipulated by the National Bargaining Council for Hairdressing, Cosmetology, and Beauty Main Collective Agreement and the National Minimum Wage Act 9 of 2018. This ensures fair compensation and legal compliance within the industry.
What is a Commission-Based Agreement:
Commission-based work agreements are common in the industry. Under these agreements, employees earn a percentage of the sales or services they provide. This method encourages employees to enhance their skills, build client relationships, and increase their productivity, directly linking their income to their performance. However, this arrangement can sometimes lead to income instability, especially during slow business periods. The HCSBC Main Collective Agreement outlines specific provisions to protect employees' remuneration and regulate the percentages used in commission-based agreements. If Employers are unsure of how to structure these agreements they should consult with their EOHCB representative to avoid any errors.
What is Minimum Wage:
The National Minimum wage sets the floor at what rate or amount an employee must be paid in remuneration for the hours worked. The amount is payable in terms of the expected agreed amount of the original hours required to work between the employee and the employer. This amount includes an employer's contribution to an employee's pension fund but excludes any payments of allowances, bonuses, or gifts/ ex-gracia. The National Minimum Wage Act aims to protect employees from being paid unreasonably low wages.
To ensure fair compensation, South African labour laws and the National Bargaining Council for Hairdressing, Cosmetology, Beauty, and Skincare Industry Main Collective Agreement mandate that all employees, including those on commission-based structures, receive at least the national minimum wage in accordance with the prescribed wage scale listed on the council’s website as per the area. This regulation is designed to provide a financial safety net and promote equitable treatment across the industry.
The HCSBC Main Collective Agreement outlines specific provisions that regulate the percentages used in commission-based agreements as per each area under Clause 31; ”Commission Agreement”, therefor a commission-based agreement must be in line with the Main Collective Agreement.
Regardless of the commission structure, employers must ensure that employees receive at least the national minimum wage. If an employee's commission earnings fall below this threshold, the employer is obligated to make up the difference. This guarantees that employees have a minimum income level, providing financial stability.
Employers are required to pay employees regularly, typically monthly or bi-weekly, ensuring timely and consistent income. This provision helps employees manage their personal finances more effectively and reduces the risk of financial distress.
The agreement mandates transparency in commission calculations and must be signed and agreed upon in writing. Employers must provide detailed statements showing how commissions are calculated, including sales figures, commission rates, and any deductions. This transparency builds trust and helps employees understand
Adhering to the minimum wage requirements and the HCSBC Main Collective Agreement is not just a legal obligation but also an ethical one. It ensures fair treatment of employees, recognizes their contributions, and provides them with a stable income. Non-compliance can result in legal consequences, financial penalties, and reputational damage for the employer.
In South Africa’s hairdressing, cosmetology, and beauty industry, commission-based work can offer significant financial opportunities. However, it is vital to remember that all employees are entitled to at least the national minimum wage as per the HCSBC Main Collective Agreement. This regulation ensures fair compensation, financial stability, and legal compliance, contributing to a more equitable and professional industry. Employees and employers alike must understand and uphold these standards to promote a fair and thriving work environment.
