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| Editor's Note |
In this edition, we notify clients of two government systems issues:
1. A problem with the SARS portal when submitting certain personal income tax
assessments; and
2. An issue with UIF limits on the Department of Labour U-filing portal
We remind clients of the upcoming employment equity deadline and urge you not to leave this until the last minute.
We consider whether an employee on annual leave can then substitute this for sick leave.
Finally, but definitely not least, we notify any clients who use labour brokers to look carefully at the recent Labour Court appeal ruling deeming labour broker workers to be full time employees after three months. This has a massive impact on employers' risk.
As usual, should you require any further detail on any of these topics, please feel free to contact us. |
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| Table of Contents |
1. SARS Portal Problem - Code 4582 - Personal Income Tax
2. Can sick leave be substituted for annual leave - after the fact?
3. Employment Equity Filing Deadline
4. UIF System Error
5. Labour Brokerage Workers to Become Full Time Employees after Three Months
6. Contact HRTorQue |
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| 1. SARS Portal Problem - Code 4582 - Personal Income Tax |
| Author: Jonathan Aitken |
Editor's Note: We sent a separate communication on this issue this month. However, we thought it worth re-publishing as it has the potential to frustrate employees if it is not fixed and they do not have the background.
Please note this is a SARS issue. It is not an issue with your software or your administrators, even though you need the support of these parties to help fix it.
A problem has arisen on the SARS portals (where income tax returns are submitted) that displays the employees IT12 annual return. This only became evident to SARS after the 1st July, and they have spent until yesterday urgently trying to fix it.
The portal is automatically populated with the IRP5 data that we uploaded to e@syfile during employer filing season. However, a SARS programming issue results in an error in the totals in the IRP 5 code 4582. This code represents the total remuneration that is used for the purposes of the allowable deduction for pension, provident and retirement fund contributions. SARS limits the deductions allowed to any retirement funds to 27.5% of this value (per the changes in March 2016). If this code is incorrect it will impact on the allowable SARS deduction for the individual concerned.
More specifically, as currently programmed, code 4582 excludes the totals for travel allowances (3701), travel reimbursements (3702) and company car fringe benefit totals (3802 and 3806). The impact of an understated total will be an under payment of tax. This has to therefore be corrected before a return is assessed by SARS.
This problem does not affect the format of IRP5s as printed and distributed to employees. This is not a payroll problem, it is a SARS problem, but the implications of this will potentially affect all employers in South Africa.
SARS have since corrected their programme and have requested that employers upload all the certificates again on their updated software.
We would therefore recommend you work with your payroll department to do the following:
• Analyse whether the situation impacts your employees
• Communicate with your employees (where you think they might have already submitted
their income tax assessments); and
• Arrange to reupload your certificates to the SARS portal (where it has an impact)
If employees have already submitted their return, and been assessed, they will need to request an assessment "Revision" on eFiling. To ensure that the information is updated correctly they will need to do an IRP5 'refresh' to ensure that the corrected certificate is pulled through and that they are reassessed using the correct information. |
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| 2. Can sick leave be substituted for annual leave - after the fact? |
| Author: Karen van den Bergh |
An employee was on annual leave and has now produced a doctor's certificate for that same period. If the employee is on annual leave and falls ill can you substitute one for the other?
The Basic Conditions states that you may not allow an employee to take annual leave during any other period of leave, which implies that if the employee is on annual leave and is required to take sick leave or family responsibility leave that the annual leave is cancelled and replaced with the other leave.
In practice, companies have different stand points on this:
1. If you fell sick before going on annual leave then the company might convert the annual
leave to sick leave; or
2. If you fell sick during annual leave then you would not be granted sick leave |
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| 3. Employment Equity Filing Deadline |
| Author: Nicky Hardwick |
Editor's Note: We really encourage employers to get organised to submit their employment equity reports on time. As mentioned in previous editions this is a real area of focus for government to levy fines and penalise employers.
Submit Employment Equity Reports by 15 January 2018.
Failure to comply could result in a fine of up to R1.5m.
Employment Equity is a legislative requirement for all companies deemed to be designated employers. A designated employer means:
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A person who employs 50 or more employees |
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A person who employs fewer than 50 employees but has a total turnover that is equal to or above the applicable annual turnover of a small business in terms of Schedule 4 of this Act. |
If you have more than 50 employees your organisation is deemed to be a designated employer and is therefore required to comply with the Employment Equity Act.
As designated employers, you are required to comply with the following in terms of the Employment Equity Act:
1. Submit Employment Equity Reports and Income Differential Statement, manually by
1 October, or submit electronically by 15 January 2018
2. Assign a Senior Manager
3. Establish a Consultative Forum
4. Prepare an Employment Equity Plan |
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| 4. UIF System Error |
| Author: Jonathan Aitken |
It has been brought to our attention that the U-filing system has been updating the UIF limits on their end incorrectly.
The Department of Labour system specialist has apparently acknowledged this mistake and will be advising employers shortly. |
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| 5. Labour Brokerage Workers to Become Full Employees after Three Months |
| Author: Jonathan Aitken |
In a big blow to labour brokers the Labour Court on appeal ruled on the 10 July that labour brokerage workers are entitled to become full employees after three months (NUMSA v Assign Services and Others (JA96/15) [2017] ZALAC 45 (10 July)).
This ruling was contrary to a previous ruling which deemed the employees to be in dual employment between the labour broker and employer.
The net impact of the ruling is to place all of the risk on the employer in relation to engaging labour broker workers. While there should previously have been no practical cost advantage of engaging labour broker workers, the practice may have been justified on the basis the employer was not able to manage the workers effectively. This may still be the case but the employer is now running a massive risk that a third party is effectively in charge of their obligations without any recourse. |
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| 6. Contact HRTorQue |
Durban
Phone: 031 564 1155 • Email: [email protected] • Website: www.hrtorque.co.za
Address: 163 Umhlanga Rocks Drive, Durban North, KwaZulu-Natal
Johannesburg
Ground Floor, West Wing, 6 Kikuyu Road, Sunninghill, 2191 |
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