Registration for UIF with the Department of Labour

It has been eye opening to see how many employers had correctly registered with SARS for PAYE, UIF and SDL, but had not been registered for UIF with the Department of Labour for UIF, or had been registered, but had not been sending monthly UIF declarations.

Initially this caused huge angst because these employers’ TERS applications were being rejected. Fortunately, UIF has allowed employers to show they had made payment, so they didn’t lose out. However, the next step post TERS will likely be short time working UIF applications where the UIF credits built up by employees will be relevant and these UIF declarations (and history) will be critical for employees to claim.

A linked registration we also see consistently being missed by smaller employers in particular is the WCA/COID registration (required by all employers) and the filing of the annual return of earnings to the Compensation Fund. There will be some pain here particularly if an employee is infected and is then unable to claim from the Compensation Fund because the employer is not registered and/or not in good standing.

Injury on Duty claims for employees who contract Covid-19 at work

On Friday, 20 March the Department of Labour published a notice on the compensation for occupationally acquired novel Coronavirus disease (COVID-19) in terms of Section 6A of the Compensation for Occupational Injuries and Diseases Act (COIDA).

Occupationally acquired COVID-19 is a disease contracted by an employee arising out of and during his/her employment.

The notice deals with occupationally acquired COVID-19 resulting from exposure to confirmed cases of COVID-19 in the workplace, or after an official trip to high-risk countries or areas.

Employers must follow the stipulated regulations when submitting claims for COVID-19.

A claim for occupationally acquired COVID-19 must be set out as per sections 65 and 66 of the COID Act.

During this pandemic it is crucial for employers to implement the rules and regulations of the Occupational Health and Safety Act 85 of 1993 (OHS Act). The regulations in the OHS Act must be followed to their full extent to avoid claims by employees and fines imposed on the employer at a later stage. The OHS Act states that an employer must ensure that its working environment is safe and without risk to the health of its employees.

For more details on the official notice, follow the link.

COIDA

Return of Earnings Audit / Employer Registration / Application for Change of Nature of the Business

Return of Earnings Audit

Government Gazette No 42113 No 1385 was published to inform employers that the Compensation Fund may select an Employer’s Return of Earnings (ROE) to an audit if an employer’s ROE was referred due to the following reasons:

  • Credit assessment or/and
  • A considerable decrease in the amount of Return of Earnings (ROE) declared from prior years

The following supporting documents will be required:

  • Affidavit (Reason for variance / Credit assessment)
  • Audited or Independently Reviewed Annual Financial Statements
  • Detailed Payroll Report
  • SARS EMP 501 / Tax Clearance
  • Manual Return of Earnings
  • Power of Attorney (Consultants, Attorney or any person appointed by an employer)

To view the official publication, please follow the link.

COIDA Employer Registration Form

Government Gazette No 42113 No 1386 was published to inform employers of the prescribed Employer Registration Form in respect of an employer’s obligations to register with the Compensation Commissioner and to furnish him with particulars.

To view the official publication, please follow the link.

COIDA Application for Change of Nature of the Business

Government Gazette No 42113 No 1387 was published to inform employers of the requirements for the change of subclass and nature of business activities.

A business is classified according to the nature of industry the employer is engaged on. To change the nature of business, the following is required:

An affidavit with the following information: 

  • Detailed description of the nature of business activities.
  • Duties of employees.
  • Any other information which will contribute to the appropriate classification of the business activities.

Documents required depending on the type of business:

  • Proof of registration certificate with Companies and Intellectual Property Commission (CIPC) in respect of business entity, close corporation or company.
  • Letter of authority in respect of the trust.
  • Proof of registration certificate with the Department of Social Development in respect of Non-Profit Organisations
  • Certified copies of Director’s ID in respect of Companies
  • Certified Copies of ID of Members in respect of a Close Corporation
  • Certified copy of ID in respect of a Sole Owner
  • Proof of SARS registration
  • Proof of SARS Tax Clearance Certificate

Reasons for the change in nature of business can be due to the following:
The nature of a business changed (sometimes this happens gradually – over years) and the business is now classified in the wrong risk category. It could also be that the company was incorrectly classified from the beginning.

The change in business activities and re-classification of business entity will be effective from the date of receipt of request by the Compensation Fund.

To view the official publication, please follow the link.

COIDA Maximum Amount of Earnings

Department of Labour published Government Gazette notice no. 42092 on 7 December 2018 with respect to the increase of the maximum amount of earnings on which the assessment of an employer will be calculated. The effective date is 1 March 2019.

The prescribed amount under Section 83(8) of the Compensation for Occupational Injuries and Diseases Act No 130 of 1993 (COIDA) has been increased to R458 520 per annum.

The COID Dilemma

Can an unpaid learner practically claim workmen’s compensation?

We are often faced with interesting practical challenges. One such challenge surfaced recently (and is likely to become more common as the government pushes for increased employment through learnerships and work experience programmes).

Background
A company offered a work experience programme where they paid for students travel in order for the students to come to their premises and learn more about the trade. In the course of this work experience one of the learners was injured and the company tried to claim compensation from the Compensation Commissioner, but faced some real challenges.

Challenges
The challenge came in three parts:

  1. Is the learner entitled to claim? Where there is a contract of service the learner should be entitled to claim compensation under the Act.
  2. Is the learner able to claim? As the learner is not being paid any salary often companies will not put the learners on to payroll. Where the learner is not on payroll the employer is usually unable to show the Compensation Commissioner that the learner is employed and levies have been paid on their behalf. It is unusual for an employer to think far enough ahead and include unpaid learners (not on payroll) on their annual return of earnings.
  3. What can the learner claim? Even if the employer has included the learners on their return of earnings or can show evidence of them being part of their headcount the first question the Compensation Commissioner will ask is to see their payslip and proof of earnings to support the claim calculation. Where they have not been paid anything, the claim is zero.

This leads to a very inequitable position where the learner should be able to claim, but the claim is worthless.

What to do?

There is no easy answer to this. In a perfect world the legislation would take this into consideration. The only alternatives are civil i.e.

  • Protect the company from any claims for compensation by getting learners to sign an indemnity form; and
  • Where the company is interested in looking after learners, consider general insurance products to cover the learner in the event of an incident at work

We are currently putting such examples to the Payroll Authors Group and other influential stakeholders in an attempt to get some clarity on the law in this regard and more importantly the practical application of the law. Unless there is a process that can be successfully followed to resolve a valid claim this would unfortunately remain a loose end that prejudices those people who need the benefits and cover the most.

Compensation Fund Annual Return fo Earnings – Deadline 31 May 2018

The W.As. 8 can be filed online (CF-Filing) on the Compensation Fund website, up until the revised deadline of the 31 May 2018.

The fund will immediately calculate the assessment amount and issue an invoice to the employer online. This can be paid and as soon as payment is received the Fund will issue the employer with a Letter of Good Standing (LOGS).

The Compensation Fund is running a number of workshops towards the end of May to help employers with the CF-Filing system.

Editor’s Note: Apparently employers new to the Compensation Fund can now register online (but we have not tested this yet).

COIDA – Maximum Earnings Increase

The maximum amount of earnings for which COIDA applies has been increased to R430,944 effective 1 March 2018. It is noticeable that this is from 1 March 2018 (the start of the tax year) as opposed to the usual 1 April 2018 which makes things easier practically for employers.

What form of leave – IOD for less than 3 days?

If an employee has an IOD for only 3 days, what form of leave should be recorded?

Section 24 of the Basic Conditions of Employment Act states that sick leave does “not apply to an inability to work caused by an accident or occupational disease”. However, Section 24 goes further to state that the above mentioned applies to all cases of sick leave except for cases where “no compensation is payable in terms of the COID and the Occupational Disease in Mines and Works Acts”.

The COID act stipulates payment rates for leave periods that are four days and beyond but does not stipulate payment rates to be paid when employees are placed on leave due to an IOD for a period of three days or less. Section 22 (2) of the COID act further states that “no periodical payments shall be made in respect to temporary total disablement or temporary partial disablement which lasts for three days or less”.

The sum of the above is that because no compensation is set out in the COID Act, leave taken due to an IOD for a period of less than three days should to be taken as sick leave.

COID Maximum Earnings Increase

The Department of Labour published Government Gazette notice no. 1577 on 29 November 2016 in respect of an increase in the maximum amount of earnings. The effective date is 1 April 2017. The prescribed amount under Section 83(8) of the Compensation for Occupational Injuries and Diseases Act No 130 of 1993 (COIDA) has been increased to R403 500 from R377 097 per annum.

Compensation for Occupational Injury & Disease Return of Earnings 2017

On or before the 30th April 2017 you are required to submit your Return of Earnings (ROE) submission to the Department of Labour, this is legislated under the: COMPENSATION FOR OCCUPATIONAL INJURIES AND DISEASES ACT (NO. 30 OF 1993). Each registered business must submit a separate return.

This Act replaces the Workmen’s Compensation Act and provides for compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees in the course of their employment, and for death resulting from injuries and diseases. The benefits are paid from the Compensation Fund, which gets its money from compulsory contributions, paid by employers. All employers carrying out business within the Republic of South Africa are required to register.

If you have not requested this service from us in the past and require us to complete and submit this return on your behalf, please contact us on [email protected]. If we have submitted for you in the past then we will complete your return and send you the figures before submission. The cost for this service is R702.00 per return (excl. VAT).

Please note the following important issues:

  • Permanent, temporary and casual employees are to be included in this return.
  • You are required to report on the earnings to a maximum of R377,097.00 per employee per annum, for the tax year March 2016 to Feb 2017.
  • You are also required to make an estimation of the remuneration and number of employees monthly for the next tax year that will begin shortly. This enables the Commissioner to budget for the following year, and to fix the new Occupational Injuries and Diseases (OID) limit. The prescribed amount in terms of section 83(8) of the Compensation for Occupational Injuries and Diseases Act, 1983 has increased from R377,097 to R403,500 per annum with effect from 1 April 2017.
  • With effect from 1 April 2013, there will be no assessment revisions entertained as a result of the fault of the employer.
  • In the event more than one return is furnished for the same assessment period, the first return submitted will be accepted as the final one.
  • Criminal proceedings will be instituted for misrepresentation of facts.