The department of labor printed an amendment to the sectoral determination NO 14 for the hospitality sector for a minimum wage increase of consumer price index (CPI) plus 1.5% to be effectively from 1 July 2013 to 30th June 2014.
Peter Cumberlege the legislative consultant for FEDHASA said that small businesses will be affected by the amendment. For example businesses like small restaurants, boutiques. The larger players will and are able to handle paying the new and higher minimum wage.
Therefore it is important that small business are herd at the public hearing so that they are not ignored.
Michele de witt the chairman for FEDHASA stated that small businesses will be affected . Small business will not be able to keep their employees as they will have to make way to cut costs or they will have to keep their employees but enjoy small profits.
The actual minimum wage for establishments with 10 or less employees is R2514.84 per mounth and R2692.74 per month those with 10 or more employees.
Small businesses will still have a fair chance of competing and making a profit. Concluded de witt.
I think by increasing the minimum wage makes things much more harder for small business to make a profit. The life of any economy is due to the small hotels and not the big businesses . Small businesses keep the population at work because they are a lot of small business that can cater to the mass crowd.
This also makes it hard for investor to come in as they do not want to have liability costs.
The government and any department needs to come down on increasing anything as it will make starting up things and keeping small business in the game harder.