So, what is the next step for the employers of domestic employees?
Employers are traditionally required to register with the Compensation Fund within 7 days of employing their first employee. Besides being subject to a fine for non-compliance if they don’t, employers will also be open to civil claims if an employee is injured on duty or becomes sick as a result of their employment. Interestingly enough, the 7-day rule does not apply to the current COIDA change to include domestic workers. Domestic employers have merely been “encouraged to register with the Compensation Fund without delay”. The Department of Employment and Labour will be undertaking a nationwide campaign to inform both employers and employees of the changes in legislation concerning domestics.
To register, employers must submit the following documents to the Compensation Commissioner:
- A completed CF-1E Form (Application for the registration of the domestic worker employer)
- Copies of the ID documents, passports, or similar form of identification for both employer and employee
- Proof of the employer’s residential address
- A copy of the employment contract
When will the employer be required to submit their first Return of Earnings (ROE)?
It is accepted (but not certain so there is some risk) by the Department of Employment and Labour that because of the timing of the amendments, most employers of domestic workers will miss the annual deadline for the filing of the Return of Earnings (ROE) information for the period 1 March 2020 to 28 February 2021 (ROE due by 31 May 2021). With the various roadshows and campaigns only just getting under way it is likely that the employers of domestic workers will have until March 2022 (possibly 31 May 2022) to complete and submit a ROE for the period 1 March 2021 to 28 February 2022.
How will the annual assessment be determined?
The ROE is used within a standard assessment formula to determine the annual amount payable. This assessment tariff is paid directly to the Compensation Fund which will, in the event of injury or illness, pay the employee. It is important to note that the assessment payable is an employer cost.
The COIDA amendments, applicable from 1 March 2021, list domestic workers as Class M, subclass 2500 at an assessment rate of 1.04. These assessment tariffs are reviewed on an annual basis and are subject to change.
Employers can calculate their yearly payments to the Compensation Fund by using the following ROE and assessment tariff formula:
Annual earnings divided by 100 X 1.04 = annual assessment payable.
This would imply the following contribution under different annual remuneration for a domestic worker, but at this point it is not clear as to whether there will be a minimum assessment value applicable to domestics so we cannot confirm that the table below is accurate.
|Annual Remuneration||Monthly Remuneration||Theoretical COIDA Contribution|
What constitutes COIDA annual earnings for ROE purposes?
The following income constitutes the COID ‘remuneration’ that would be factored into the ROE calculation mentioned above:
- Salaries and/or Wages
- Cost of Living Allowance
- Bonuses (incentive or otherwise)
- Overtime payments (regular)
- A guaranteed 13th cheque
- Housing Allowance
- Commissions (only if given to an employee who also has a basic salary, and not agents or contractors)
- Cash value of meals and accommodation provided to an employee
- Any other payment due to an employee in accordance with the employee’s contract of service
How can we help you?
The HRTorQue team can assist you in registering your domestic, submitting the annual Return of Earnings and ensuring that the payment is made timeously. We can also assist with the sourcing of a Letter of Good Standing if necessary. We also run domestic payrolls and help employers with all compliance in this area. Please contact [email protected] if you would like any such assistance.