Most companies claim to understand UIF legislation. Yet, there are sections of the Unemployment Insurance Act, no 61 of 2000, the Unemployment Insurance Contributions Act, no 4 of 2002 and the Unemployment Insurance Amendment Act, no 32 of 2003 that people get wrong. Due to the misinterpretation of these acts and the amendment to the Unemployment Insurance Contributions act to include SARS for the collecting of UIF and SDL contributions, many companies remain non-complaint to how these acts work.
The most common error made by companies is to believe that their responsibility for UIF ends once they have paid the contributions over to SARS. Section 56 of the Unemployment Insurance Act states that all registered employers must furnish details to the UIF Commissioner by the seventh day of each month. These details include the business details (meaning the address and contact details of the business, including the details of any branches the business has), the details of all employees employed, the change in employment status of each employee and any additional information the commissioner may request from time to time. Section 10 (2) of the Unemployment Insurance Contributions Act re-iterates what is legislated in the Unemployment Insurance Act, making specific reference to the recording and reporting of new engagements and terminations.
In addition, with the electronic email declarations, many companies’ emails would automatically place an attachment of the company logo onto outgoing emails. This would create an additional attachment to the email sent, which would result in the actual file not been read by the UIF system.
After investigation into company compliance to the acts, it was declared in August 2012 that only 15% of companies were fully compliant. This was due to:
- companies not doing the monthly declaration because the company management believed that their UIF responsibility ended when they paid the contributions to SARS,
- companies that sent the electronic files with the same extension each time, and
- companies who inadvertently sent the declaration file email with more than one attachment.
To streamline and simplify the process of doing the declarations by companies and for the employees to be able to apply for compensation from the UIF easier, the Department of Labour, Unemployment Insurance division has launched uFiling. This is designed to make the UIF process paperless. It also eliminates the need for applicants for the benefits to stand in long queues to apply and to collect their payments. Companies that have to pay their contributions directly to the Department of Labour may now process this via uFiling.
Albert Tshidavhu, Head of Department for Labour said: "We want you to focus on your core business which is to make profits and that is why we introduced the system to save you costs and the cumbersome administration process so that you can just click a button to comply with UIF processes.”
In order for a company to register for uFiling they need to use the link http://www.ufiling.co.za/ and select the “Activate my uFiling Account”. As part of this process, the company will be asked to complete a form to request UIF accreditation. Only accredited companies can use uFiling. Employees can also use the same link and option to register as an employee. If the employee’s current company, or their previous company, if unemployed, is not accredited, they will not be able to use the uFiling system.
The reason behind the accreditation process is to assist companies to become compliant. Although there will be a cut-off date where all companies will be required to be accredited, this has not been announced. Employees who either work or worked for companies that are not accredited, will now place pressure on companies to become accredited.
The accreditation process is relatively simple. It is required that all the company’s declaration files for the past three years are up to date. If this is lacking, then the company will not receive accreditation until this has been set in order. If a company applies for accreditation, and they are not compliant, the UIF division of the Department of Labour will send a notification to the company stating what is outstanding, and give the company a deadline to rectify this.
The manual UI19 will soon fall away and there are already Department of Labour Branches that are not accepting these, unless it can be proved that the company does not have access to a computer system. It is not known if the email declarations site will be discontinued, but this is a possibility.
This move has been done to get all South African companies compliant to the legislation. Although we do not have a timeline of when the accreditation process must be done, it is advisable to get this done before there is a rush to get this done when a final cut off will be announced. If any assistance is required in doing this, please contact LabourNet.
Training and Development Practitioner – LabourNet Payroll Solutions
Over 20 years’ experience at various levels of Payroll and Remuneration and Benefits.