The Unemployment Insurance Contributions Act excludes employees who are employed by an employer for less than 24 hours a month, as well as a number of other employees. This exclusion is consistent with both International Labour Organisation principals and with our own BCEA and LRA provisions.
However some points of interest (and difficulty) arise from this exclusion, if you run a weekly or fortnightly payroll. If the employee is employed for less than 24 hours in the first week or fortnight of the month, then legally speaking the payroll may not withhold a pro-rate contribution amount from the employer and the employee. If the employee exceeds 24 hours in the remaining periods of the month a ‘catch-up’ contribution amount must then be withheld. Weekly payslips with varying UIF contribution amounts are issued, and this causes queries at the pay office.
In years past, verbal rulings have been given by the Fund to say that if contributions are made by employees who are employed for less than 24 hours per month and a benefit is applied for at a later stage, the benefit claim will be honoured and paid. While this is a verbal ruling, in my opinion it can be relied upon because there is nothing in the declaration that tells the UIF authorities that the individual was employed for less than 24 hours per month. Therefore, there is no basis for them to refuse the benefit claim which in any event will probably be for a small amount.
For this and other payroll challenges and queries contact [email protected].