Understanding Your Responsibility As An Employer

Understanding Your Responsibility As An Employer

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Hiring employees requires more work from you as the employer than simply placing a job ad, hiring the right person and training them on their role.

You need to be aware of the Labour Law requirements in terms of the various funds and other stipulated registrations. The law does not differentiate between different size organisations, and therefore it is imperative that SME’s fully understand the implications of all aspects of Labour legislation.

Related: 5 Factors That Make a Great Boss

Salary deductions

Employers may only deduct money from a worker’s salary if the worker agrees or if they are required to do so. The provisions for deductions do not apply to workers who work less than 24 hours a month.

Employers may not deduct money from a worker’s pay unless –

  • the worker agrees in writing to the deduction of a debt, or
  • the deduction is made in terms of a collective agreement, law (e.g. UIF contributions), court order or arbitration award.

Deductions for damage or loss caused by the worker may only be made if –


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  • the employer has followed a fair procedure and given the worker a chance to show why the deduction should not be made,
  • the worker agrees in writing, and
  • the total deduction is not more than 25% of the worker’s net pay.

Employers must pay deductions and employer contributions to benefit funds (pension, provident, retirement, medical aid, etc.) to the fund within 7 days.

What is UIF

UIF-Logo

UIF stands for Unemployment Insurance Fund and you need to register for it, whether or not you employ staff. It applies to all employers and workers (except those working less than 24 hours a month), learners, public servants, foreigners working on contract, workers who get a monthly State (old age) pension and workers who only earn commission. The fund makes short-term provision for individuals who become unemployed, or are unable to work because of illness, maternity or adoption leave. It also provides financial relief to the dependants of deceased contributors.

As an employer it is your responsibility to register with UIF and make the monthly payments. These include a 1% payment from you (based on your employees’ individual salaries).

Each individual employee needs to make a further 1% payment, but it is your duty to deduct this amount from their salary and pay it to UIF, together with your contribution, on a monthly basis to SARS if you are registered for PAYE or directly to the UIF if you are not.

You can register your business by completing a UF8 form and each new employee needs to be registered using a UI-19 form. These can be obtained from the Department of Labour.

Related: Why Your Business Needs Employment Contracts

What is COIDA

disability-south-africa

COIDA stands for the Compensation for Occupational Injuries and Diseases Act and being registered for it works in your favour. It is based on a no-fault system which means employees are entitled to compensation regardless of who caused the injury or illness.

But it also exempts you from liability for injuries or diseases contracted by your employees in the course of their work. In other words, employees can’t claim damages from you in those events. Instead, COIDA allows them to claim compensation for total or permanent disablement and death as well as reasonable medical expenses arising out of injury for two years.

You are required to pay the employee 75% of their normal salary for three months during the time that they are injured or ill but the fund pays you back this entire amount and covers all the relevant medical expenses.

If you are not registered, however, you are not indemnified. Getting registered involves submitting a WAs2 form, together with a copy of the registration certificate from the Registrar of Companies, or your ID document, if you are a sole proprietor. Every year before 31 March you will need to submit a statement of earnings paid to your employees. You will also be required to pay an assessment tariff, which is fixed according to your class of industry.

If an employee gets injured during the course of their work or falls ill as a result of their work, they can claim from the Worker’s Compensation fund. Dependants of employees can claim if a family member dies from an accident or disease. Employees wishing to claim will need to be furnished with one of the WG30, WAs2 or WAc1(E) forms, which they need to submit to the Compensation Commissioner for compensation.

How Does Maternity Leave Work?

maternity-leave

The law protects women against unfair discrimination arising from any form of prejudice. An employer may not ask a candidate who applies for a job if she is pregnant, nor if she is planning to start a family at any stage.

If you do, she could argue that you are discriminating against her. Equally, she is in no way obliged to disclose her pregnancy when applying for a position. The bottom line is that it has nothing to do with the candidate’s ability to meet the requirements of the position. And nothing stops her from resigning once she has returned to work after taking maternity leave. She has rights regardless.

The Basic Conditions of Employment Act stipulates that an employee is entitled to four months unpaid maternity leave. All that is required is a notification by the employee that she is pregnant, accompanied by a doctor’s certificate. This leave should start four weeks before the expected date of birth, or when a doctor or midwife certifies that leave is necessary for the health of the mother or child. An employee must notify her employer in writing of the date on which she wants to start maternity leave. She may not work for six weeks after delivery, unless she is declared fit to do so.

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An employee who has a miscarriage during the last three months of pregnancy or who bears a stillborn child is also entitled to six weeks maternity leave, whether or not she has started maternity leave at the time. Companies in South Africa are not obliged by law to provide paid maternity leave. A female employee who works for a company that does not offer maternity benefits can claim from the Maternity Benefit Fund if she has been contributing to the Unemployment Insurance Fund (UIF).

An employer who pays maternity leave does have some rights, however. Paid maternity leave is a benefit, and the company is within its rights to conclude a contract with the employee stating that if she does not return to work for at least one year following her confinement, she will be obliged to return the salary she earned during her maternity leave.

South Africa has no paternity leave provisions in place, but workers who have been employed at a company for longer than four months may take three days’ paid family responsibility leave during each year of employment.

Family Responsibility Leave

Workers may take up to three days of paid leave a year to attend to certain family responsibilities. The provisions for family responsibility leave do not apply to workers who work less than:

  • Four months for their employer
  • Four days a week for one employer
  • 24 hours a month.

Family responsibility leave expires at the end of the annual cycle. Employees may take family responsibility leave:

  • when their child is born
  • when their child is sick
  • in the event of the death of a:
    • spouse or life partner
    • parent or adoptive parent
    • grandparent
    • child or adopted child
    • grandchild
    • sibling.

Employers may require reasonable proof of the birth, illness or death for which a worker requests leave.

Related: What Young People Want From Work

Overtime

The amount of overtime a worker may work is limited. Workers must get 1,5 times their normal hourly pay or paid time off in exchange for overtime. Alternatively, a worker may agree to receive paid time off or a combination of pay and time off.

The section of the Basic Conditions of Employment Act that regulate working hours does not apply to:

  • workers in senior management
  • sales staff who travel and regulate their own working hours
  • workers who work less than 24 hours in a month
  • workers who earn more than R115 572 per year
  • workers engaged in emergency work are excluded from certain provisions.

Workers may not work:

  • overtime, unless by agreement
  • more than 10 hours’ overtime a week (collective agreement may increase this to 15 hours per week for up to two months a year)
  • more than 12 hours on any day.

Employee Pay Slips

Employee-pay-slip

Each time workers are paid, employers must give them a pay slip containing certain details. Employers must give workers the following information in writing when they are paid:

  • Employer’s name and address
  • Worker’s name and occupation
  • Period for which payment is made
  • Total salary or wages
  • Any deductions
  • The actual amount paid
  • If relevant to the calculation of pay:
    • Employee’s pay and overtime rates
    • Number of ordinary and overtime hours worked
    • Number of hours worked on a Sunday or public holiday

The total number of ordinary and overtime hours worked in the period of averaging, if a collective agreement to average working time has been concluded

Public Holidays

Workers must get paid time off for public holidays, but if they agree to work, they must be paid double their normal daily wage. The provisions for public holidays do not apply to –

  • senior management
  • sales staff who travel
  • workers who work less than 24 hours a month

Workers must get paid time off for any public holiday that falls on a working day. Working on a public holiday is by agreement only. A public holiday can be exchanged with another day by agreement. A public holiday cannot be counted as annual leave.

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Employee Sick Leave

Workers may take the number of days they would normally work in a six-week period for sick leave on full pay in a three-year period. Employers may insist on proof of illness before paying a worker for sick leave. The provisions for sick leave do not apply to:

  • workers who work less than 24 hours a month
  • workers who receive compensation for an occupational injury or disease
  • leave over and above that provided for by the Act.

During the first 6 months of employment, workers are only entitled to one day of paid sick leave for every 26 days worked. An employer may require a medical certificate before paying workers who are absent for more than two consecutive days, or who are often absent (more than twice in an eight-week period).

Staff Working Hours

overtime

Basic Conditions of Employment laws set maximum working hours and minimum rest and break periods for workers. The section of the Act that regulate working hours does not apply to:

  • workers in senior management
  • sales staff who travel and regulate their own working hours
  • workers who work less than 24 hours in a month
  • workers who earn more than R115 572 per year
  • workers engaged in emergency work are excluded from certain provisions.

The maximum ordinary hours per day for someone who works one to five days per week is nine, the maximum amount of hours per week is 45. For those who work more than five day per week should work a maximum of eight hours per day and 45 hours per week. Workers may agree, in writing, to work up to 12 hours a day without getting overtime pay. However, these workers may not work more than:

  • 45 ordinary hours a week
  • 10 hours’ overtime a week
  • five days a week

Workers must have a meal break of 60 minutes after five hours’ work. A written agreement may:

  • reduce meal intervals to 30 minutes
  • eliminate meal intervals for workers who work less than 6 hours a day

Workers must have a rest period of 12 hours each day; and 36 consecutive hours each week (must include Sunday, unless otherwise agreed).

Workers working between 18h00 and 06h00 must:

  • get an allowance, or
  • work reduced hours, and
  • have transport available to them.

Skills Development Levies

Employers must pay 1% of their workers’ pay to the skills development levy. The money goes to Sector Education and Training Authorities (SETAs) and the Skills Development Fund to pay for training. The Skills Development Levies Act applies to all employers except–

  • the public service;
  • religious or charity organisations;
  • public entities that get more than 80% of their money from Parliament; and
  • employers:
    • whose total pay to all its workers is less than R 250 000 per year; and
    • who do not have to register according to the Income Tax Act

Employers who are required to pay the skills development levy must register with the South African Revenue Services (SARS). Employers must pay 1% of all their workers’ pay to the skills development levy every month. Employers must pay the levy to the South African Revenue Services (SARS) by the seventh day of each month. Employers who do not pay will have to pay interest on the money they owe and may also have to pay a penalty.

What is PAYE

All employers are required to deduct Employees’ Tax from their salaries. The amounts deducted must be paid by the employer to SARS on a monthly basis. The process of deducting or withholding tax from remuneration as it is earned by an employee is referred to as Pay-As-You-Earn (PAYE).

Employers are required to:

  1. Deduct the correct amount of tax from employees’ remuneration.
  2. Pay this amount to SARS monthly, ensuring SARS receives a Monthly Employer Declaration (EMP201).
  3. Reconcile these deductions and payments with the completion of the interim and annual Employer Reconciliation Declarations. During the reconciliation periods, employers are required to submit an Employer Reconciliation Declaration (EMP501) confirming or correcting the PAYE, SDL and UIF declarations per EMP201s submitted, the payments made and the tax values of the Employee Tax Certificates [IRP5/IT3(a)].
  4. Issue tax certificates to employees
  5. An employer must issue an employee with an IRP5/IT3(a) where remuneration is paid or has become payable and from which Employees’ Tax was deducted. The IRP5/IT3(a) discloses the total employment remuneration earned for the year of assessment and the total deductions. IRP5/IT3(a) certificates must be issued to employees during the annual Employers tax season.

Related: 5 Ways to Make Your Payroll & HR Solution Pay for Itself

Seek professional advice

There is a lot to keep track of once you become and employer. It is advisable to call in an expert. You can use the services of a suitable experienced and qualified HR consultant who can help to set up the principles and processes of the above, and then work on an ad hoc basis only as and when needed reducing the cost of a full-time HR manager.

Useful resources

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