National COVID-19 Lockdown – From an Employers perspective
The nation-wide lockdown will be enacted in terms of the Disaster Management Act and will entail the following:
From midnight on Thursday 26 March until midnight on Thursday 16 April, all South Africans will have to stay at home.
The categories of people who will be exempted from this lockdown are the following:
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health workers in the public and private sectors,
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emergency personnel, those in security services – such as the police, traffic officers, military medical personnel, soldiers – and other persons necessary for our response to the pandemic.
It will also include those involved in the following:
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production, distribution and supply of food and basic goods,
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essential banking services,
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the maintenance of power, water and telecommunications services,
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laboratory services, and the provision of medical and hygiene products.
Individuals will not be allowed to leave their homes except under strictly controlled circumstances, such as to seek medical care, buy food, medicine and other supplies or collect a social grant.
Firms that are able to continue their operations remotely should do so.
All shops and businesses will be closed, except for pharmacies, laboratories, banks, essential financial and payment services, including the JSE, supermarkets, petrol stations and health care providers.
Companies that are essential to the production and transportation of food, basic goods and medical supplies will remain open. We will publish a full list of the categories of businesses that should remain open.
The governments focus is on three main areas namely:
1. Supporting the vulnerable
2. Supporting people whose livelihoods will be affected.
3. Assisting businesses that may be in distress.
Supporting the vulnerable
Following consultation with social partners, the government has set up a Solidarity Fund, which South African businesses, organisations and individuals, and members of the international community, can contribute to.
Supporting people whose livelihoods will be affected
The government is in consultation on a proposal for a special dispensation for companies that are in distress because of COVID-19. Through this proposal employees will receive wage payment through the Temporary Employee Relief Scheme, which will enable companies to pay employees directly during this period and avoid retrenchment.
Any employee who falls ill through exposure at their workplace will be paid through the Compensation Fund.
Assisting businesses that may be in distress
In the event that it becomes necessary, the government will utilise the reserves within the UIF system to extend support to those workers in SMEs and other vulnerable firms who are faced with loss of income and whose companies are unable to provide support. Details of these will be made available within the next few days
Using the tax system, we will provide a tax subsidy of up to R500 per month for the next four months for those private sector employees earning below R6,500 under the Employment Tax Incentive. This will help over 4 million workers.
Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months. This intervention is expected to assist over 75 000 small and medium-term enterprises.
We are exploring the temporary reduction of employer and employee contributions to the Unemployment Insurance Fund and employer contributions to the Skill Development Fund. The Department of Small Business Development has made over R500 million available immediately to assist small and medium enterprises that are in distress through a simplified application process.
The Industrial Development Corporation has put a package together with the Department of Trade, Industry and Competition of more than R3 billion for industrial funding to address the situation of vulnerable firms and to fast-track financing for companies critical to our efforts to fight the virus and its economic impact.
The Department of Tourism has made an additional R200 million available to assist SMEs in the tourism and hospitality sector who are under particular stress due to the new travel restrictions.
Download the TERS application process doc here.
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