The agreement is a culmination of protracted talks and negotiations between social partners representing organised labour and civic society organisations at the National Economic Development and Labour Council (Nedlac).
Deputy President Cyril Ramaphosa on Wednesday announced that the national minimum wage has been set at R20 per hour or R3 500 per month for those that work a 40-hour week.
Those who work a 45-hour week will have their minimum wage set at R3 900.
The NPC says the introduction of the National Minimum Wage agreement and other measures to strengthen labour stability and collective bargaining is an important step in creating a more equal, just and prosperous society, as envisaged in the National Development Plan (NDP) Vision 2030.
Approximately 6.6 million workers earn less than R3 500.
The National Planning Commission has applauded all the parties that took part in the signing of the agreement.
“For South Africa to achieve its objective of eliminating poverty, reducing inequality and creating jobs, it requires greater trust between the State, labour and business.
“As highlighted in the NDP, the lack of trust between government and business and in turn, between these sectors and the labour movement, is a stumbling block towards faster economic development.
“This agreement shows that through persistence and hard work, South Africans can find common cause to address and find solutions.
“Achieving full employment, decent work and sustainable livelihoods depends on making tough choices. The ability to do this is a function of leadership among all social partners. This agreement shows the willingness by all parties to the agreement to make these tough choices and to find common ground in the interest of all South Africans,” said the NPC in a statement.