Now is not the time to put your legislative compliance at risk.
We are in the eye of the storm, and many employers now have the time to reflect, breathe and get ready for the full-blown onslaught of the tail end, although comparing this to a natural storm will be underestimating the expected tail end of our very real situation.
South African businesses have an uphill hill battle to climb and fortunately not alone, for the first time in our lifetime we are faced with a once in a century lockdown, hard reset or restart whatever one would like to call it.
A hard reset of how we see, do and plan business strategies while needing to look towards helping hands presented in good faith to get the business operations in first gear again.
Help presents itself by means of Government and Private initiatives through the Employer and Employee.
To the most vulnerable, the employee, and indirectly the employer, the South African Government (Treasury) made the following relief measures available.
Temporary Employer/Employee Relief Scheme (TERS)
TERS is a special benefit created under the UIF umbrella that stemmed out of a previously defined benefit scheme facilitated by the CCMA, this scheme has now been adapted itself very well to accommodate South African employers to claim on behalf of their employees for temporary shutdown during the COVID-19 Crisis.
A worrying fact at the point of writing this is that a large volume of claims could not be paid due to information supplied by employers or employers themselves can not be validated and confirmed to be legislatively entitled to these benefits. This can be contributed directly to non-adherence to legislation.
Further assistance making use of the unemployment insurance fund is:
Claim for reduced work time.
Where a contributing employee is in quarantine for 14 days due to COVID 19, the employee shall qualify for an Illness Leave Benefit.
During the unfortunate event where a contributor passes on due to COVID 19, the dependents will qualify for a benefit.
Normal Unemployment benefit
A contributor who loses his/her employment due to retrenchments or for the sake of this topic the COVID 19 pandemic.
Further to the above, payment holidays and deferral of legislative payments and expansion of already available incentives are made available.
In the form of the following:
Deferral of PAYE payment.
A compliant employer may deduct 35% from the PAYE liability upon submitting their EMP201. This arrangement initially started at 25% but increases to 35%, further to this on a case by case matter a full deferral can be requested for approval.
Expansion of Employment tax incentive’s
As from the 1st of May (to be finalized), an increase in the expanded employment tax incentive amount will be available whereby the previously mentioned amount of R500 in April will be increased to R750 per month.
For now, the following will apply,
As per the prescribed validation of an employee that qualifies it has been extended to
18 to 29 who are no longer eligible for the ETI due to already claimed for within the preceding 24 months; and
30 to 65 who are not eligible for the ETI due to their age.
In future, May (if not retrospective to April) the following will apply,
Skills Development Levy Payment Holiday.
A payment holiday relating to Skills development Levy which equates to 1% of an employee’s Gross Remuneration has also been introduced from May for four months. One can easily calculate this value based on UIF remuneration without a capped amount.
Some interesting stats based on a subset of the South African SME market that will be most affected by the COVID-19 pandemic.
For more information on the above topic, please contact the LabourNet Helpdesk at
0861 LABNET (0861 522638).
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