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.

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.

Following a landmark ruling by the Constitutional Court, which ordered that domestic workers be included in and protected by the Compensation for Occupational Injuries and Diseases Act (COIDA), revised rules were published in Government Gazette No. 44250 on 10 March 2021.

This Gazette confirms that domestic workers will now be afforded cover by three main compensation measures as determined by the COIDA. These include:

• Temporary total disablement, when an injured employee is booked off for four days or more by a treating doctor to recuperate from the injuries or condition. The maximum period payable is 24 months.
• Permanent disablement lump sums, which are paid on a medical report indicating that the employee has reached maximum medical improvement, limited to 30% of the benefit.
• Permanent disablement pensions, which use the same criteria as lump sums, but can run to 100% of a benefit payment.

Benefits, and minimum and maximum compensation limits, are based on the type and extent of an injury or disability.

The Compensation Fund will cover “reasonable” medical expenses following on-the-job incidents. If the employee requires chronic medication, as a direct result of an injury or illness contracted while at work, the Compensation Fund will cover these costs too. The Compensation Fund will also pay for assistive devices such as wheelchairs and prosthetics, along with rehabilitation, reintegration and return to work programs.

Funeral expenses are payable to dependents of a deceased employee. If the death occurred before April 2019, funeral expenses already incurred by the dependents will be refunded up to a defined maximum. For those who died after 1 April 2019, the benefit is R18,251 paid as a lump sum.

Surviving spouses will be paid compensation which includes either a once-off lump sum award or pension award. A child pension is also offered, which pays children of the deceased up until the age of 18. This pension may be extended for children who are still going to school after turning 18 years.

If there is no surviving spouse or child, a wholly dependency award may be granted to the parents or siblings of the deceased employee who were dependent on the income of the deceased employee.

The Constitutional Court have now ruled that it is unfair for domestic workers to be excluded from the Compensation Fund for occupational injuries and disease. This is not unexpected and will be welcomed by employees in this sector.

The biggest challenges will be working out how this will operate in practice given how dysfunctional the Compensation Fund is already (It struggles to cope with existing employers let alone another 5 million employers); and how the increased compliance risk and cost might impact employment in this space.

The case that sparked the ruling involved a domestic worker who was partially blind and while cleaning windows, fell off a ladder into a swimming pool and drowned. This unfortunate incident highlighted areas of potential risk for injury in a home and the consequences of an informal domestic arrangement which left the survivors of this domestic worker with no funds or recourse as a result of dangerous or undesirable workplace practice.

The next step will be for the legislation changes to be promulgated. A big concern will then be that without any guidance form the Compensation Fund (very unlikely this will be forthcoming), this will require all domestic employers to get registered which is time consuming and expensive and it is unclear what category they should be registered in. It will then require domestic employers to submit an annual return of earnings. Together these steps will cost a couple of thousand Rand so we expect many employers to be non-compliant in the short term which will raise civil claim risks for them.

HRTorQue offers a domestic payroll option to make sure employers are compliant in this space. Contact us for more information.