TERS Update

Temporary Employer Relief Scheme (TERS) benefit claims proved to be extremely challenging in April with the practical application of the legislation changing on a number of occasions and the UIF website crashing on occasion.

It was hoped that May applications would be better. However, the website only opened for May applications in very late May and while there are some promising signs with new questions being posed by UIF, there continue to be some practical challenges which employers need to work through. There is still a level of uncertainty and risk in making applications and employers need to be cautious.

Some points to note include:

• There was a rumour that the UIF would be only paying funds directly into employees’ bank accounts even if employers had advance funded employees through the May payroll. Thankfully the system still allows you the option of selecting where the funds are paid…
• It was clear from April submissions that if you are part of a larger group with the same UIF number, or if you are part of a bargaining council but not all employees are members, then the employer needs to be careful in making one submission themselves (rather than individually for each company or separately for the bargaining council and no bargaining council employees as neither would work)
• The UIF website now asks some specific questions to employers. It is important that the employer has thought through how their TERS application ties up with their communication and practical implementation with employees:
  • Confirmation of April’s submission by the employer:
    • Employee/s did not work, or any amount paid was deemed to be leave income/an advance by the employer
    • Employee/s did work and received remuneration and any excess above normal salary refunded to UIF by the employer
    • Employee/s did work and received remuneration and full amount paid by UIF paid over to employee
  • Please confirm you have the following document available to make the submission:
    • Bank Confirmation Letter
    • Signed Approval/Acceptance Letter for April
    • Proof of TERS Payment to Employees for April
    • Refunds to the UIF (if applicable)
  • For May 2020, are the salaries and remuneration during lockdown for the employees still the same as in April 2020? (Note: if you answer Yes to this be careful because the application automatically submits and you have no further ability to change anything)
• The “Leave Income” field which has caused so much confusion has been amended for May to be “Remuneration for work to be done in May 2020 (excluding leave income or payment in advance”. While more helpful than April there is still no legislative guidance on what this means. Expert opinion suggests an employer should be clear with employees what is happening and should include in this column only remuneration for actual hours worked as opposed to any leave pay, taxable advances (to provide remuneration to employees in anticipation of the TERS benefit) or income where no work has been done. But be aware because there is no practical guidance there is still risk here for employers.

Overall, probably our biggest concern with TERS is the potential interpretation the UIF may take in future where employers have claimed where their business has been impacted by Covid-19, but where they struggle to show clearly that they have faced partial closure. We fear this may come back to bite employers who may have been too aggressive in their interpretation in this space.