SEPTEMBER 2019 – ZIMBABWE
CURRENCY REFORMS AND TAX CHANGES

It is important that employers note the following: 

Changes to tax rates due to currency reforms

Currency reforms

Statutory Instrument (SI) 142 of 2019, published as part of the Reserve Bank of Zimbabwe (Legal Tender) Regulations 2019, declares that the Zimbabwean dollar will be the sole currency for legal tender purposes, effective 24 June 2019.

The RTGS (Real Time Gross Settlement) dollar was introduced in February as a first step towards a new currency by year’s end. RTGS dollar means any funds held as bank deposits under the RTGS system established in terms of the National Payment Systems Act. Bond notes and RTGS dollars are at par with the Zimbabwe dollar (ZW$).

Other currencies, specifically US dollars, British pounds, South African rand and Botswana pula, are no longer legal tender. Even though SI 142 is valid, it does not expressly state that foreign currencies cannot be used in transactions or to price goods.

Tax changes

As a result of the currency adjustments, the Minister of Finance and Economic Development, Hon Prof Mthuli Ncube, announced in the 2019 mid-year budget review and supplementary budget, delivered in August 2019, a review of the tax-free threshold from the current ZW$350 to ZW$700 and widening of the tax bands to a maximum of ZW$30 000, above which income is taxed at the marginal tax rate of 40%, including separate US$ and ZW$ tax tables. This took effect on 1 August 2019.

Employees who earn in foreign currency will, however, continue to settle their tax liability in foreign currency. Every enactment in US$ is to be construed to be ZW$ at a rate of 1:1.

A new Final Deduction System (FDS) year of assessment came into effect on 1 August 2019 and ends on 31 December 2019. Taxpayers will be required to submit two annual income tax returns (ITF16s) for 2019.

Annual Tax Rates before and after 1 August 2019:

 

Contact our legislation team at info@crs.co.za if you require any additional information.
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RS Technologies (Pty)Ltd. All Rights Reserved.

Embracing workforce transformation in a digital world

Embracing workforce transformation in a digital world

Workforce transformation affects all aspects of business and companies must plan for the impact it is having and will continue to have on operations. Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, says the evolving business landscape means companies must start thinking now about the skills they need for the future.

There are currently two major catalysts driving workforce transformation.

The first revolves around modern generations and their preferences for work. Generation X thrives on freedom and responsibility in the workplace. For generation Y, work-life balance is a top priority, along with work satisfaction and developing lasting relationships with people who matter. While Generation Z prefers individual tasks over team-based work activities, they also value physical connection and prefer independence rather than isolation.

Secondly, technology development is having a significant impact on workforce transformation. As automation becomes more prevalent in business and people’s lives, certain jobs are becoming redundant while new ones are being created. Additionally, the Fourth Industrial Revolution is pointing to a merger between technology and how people work and live their lives.

Tech landscape

“It must be remembered, however, that people do not drive technology. Instead, technology drives people. Technology is the only way companies can gain a competitive edge. New technology is being developed daily, but it is meaningless if it is not implemented,” says Myburgh.

Moreover, just as technology drives business, so are people driven by business. “Everyone wants to be paid at the ed of the month and if a company decides to implement new technology, the workforce has no choice but to accept it.”

On the other side of the coin, the argument could be made that people drive technology.

“An example of this is the CRS Technologies’ Engage resource management and reporting tool. This is driven by the employers and employees who use it and is geared to making users’ lives easier without making them redundant.”

According to a Deloitte study, to attract modern employees, companies must offer vigorous training and leadership development with a tangible focus on diversity.

“Organisations must change how they recruit, retain, and develop talent,” says Myburgh. “Besides hiring smart, talented people, this can be achieved through the establishment of internal apprenticeship programmes, multifaceted career paths, and by matching projects with the required skills sets.”

Embracing change

To this end, companies can take certain steps to help employees adapt to and embrace this continual change occurring.

“In today’s business environment no one can afford to be resistant to change because change is constant. Any opposers (it is usually those who have been working a certain way for many decades that find it difficult to adapt) must be excluded because they will become an obstruction to the business by actively working against the change management seeks to introduce.”

Throughout this, communication is key. Management should be completely transparent about any change they plan to introduce so that all employees know what to expect, including the implications and consequences of the change. Any uncertainty could lead to resistance and it is therefore important to ensure that everyone has clarity on what is taking place.

“Change happens extremely quickly. Technological innovation can change the face of an industry almost instantaneously. Companies need to see it coming and be ready for it when it happens. Hold strategy sessions to find out what developments and innovations are on the cards. Business leaders need to identify innovations in the space in which they operate, including who their competitors are and what they are doing. Equally important is to keep an eye on some of the more unique developments on the horizon. This will ensure competitors are constantly striving to catch up with you rather than the other way around,” Myburgh concludes.

SEPTEMBER 2019 – SOUTH AFRICA EMPLOYMENT EQUITY EEA4 FORM

It is important that employers note the following:

Changes to the Employment Equity EEA4 Form

In August 2019 the Department of Employment and Labour repealed the old EEA4 form, as published in the Employment Equity Regulations of 1 August 2014, and replaced it with a new version. The new form became effective on 8 August 2019.

The EEA4 form generally contains the format for reporting income differentials to the Employment Conditions Commission.

The Department of Labour stated that the old form is ineffective. The main purpose of the new form is to enable companies to analyse salary information pertaining to employment equity more diligently and provide reasons for income differentials to reduce the remuneration gap between the highest and lowest paid employees.

Two new sections, section D and E, have been added to the EEA4 form. Section D requires the remuneration of the employee with the highest total remuneration, i.e. fixed/guaranteed and variable remuneration, in terms of race group and gender for all the occupational levels, except the lowest occupational level in a company. Section E requires the average/median remuneration and the remuneration gap.

The new format specifically focuses on the following:

  • Reporting on fixed/guaranteed annualised salaries per occupational level, race and gender.
  • Reporting on variable annualised salaries per occupational level, race and gender.
  • Reporting on average annual pay for the top 10% of an organisation’s workforce.
  • Reporting on average annual pay for the bottom 10% of an organisation’s workforce.
  • Reporting on average annual pay for the middle earners of an organisation’s workforce.
  • Reporting on whether an organisation has a policy in place which addresses and closes the vertical gap between the highest and lowest paid employees.
  • Reporting on whether the remuneration gap between the highest and lowest paid employees in an organisation is aligned with remuneration policy.
  • Indicating whether affirmative action measures to address remuneration gaps are included in the organisation’s Employment Equity Plan.

Employers are required to complete the EEA4 form and submit it with the EEA2 form when they complete their employment equity reports.

The report can be submitted between 1 September 2019 and 15 January 2020.

To view the Government Gazette containing the new form, follow the link, selecting 42627 8-8 Labour under Separate Gazettes.

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2019 C
RS Technologies (Pty)Ltd. All Rights Reserved.

Why we braai on Heritage Day 

Why we braai on Heritage Day

The legendary King Shaka was renowned for the prominent role he played in uniting the various Zulu clans into a cohesive nation. Consequently, Shaka Day was observed each year in KwaZulu-Natal on 24 September, the presumed date of the king’s death in 1828.

During the 1990s, just before the dawn of democracy, the then government of national unity chose not to include Shaka Day in the proposed Public Holidays Bill. The Inkatha Freedom Party objected strongly to this decision and refused to sign the Bill.

As a compromise, it was eventually decided to include the holiday but rename it Heritage Day to promote unity among South Africa’s diverse cultural heritage.

Fast forward to 2005 and celebrity chef Jan Scannell (aka Jan Braai) began campaigning to rebrand the holiday as Braai Day as a means of nurturing a common national pastime which is shared across all South African races and cultures. “The ingredients may differ, but one thing that never changes is that when South Africans have something to celebrate, we light fires and prepare great feasts,” he reasoned.

Two years later Archbishop Desmond Tutu was appointed patron of Braai Day. “We’re going to have this wonderful thing on the 24th of this month,” he was quoted as saying, “when we all gather round one fire. It’s a fantastic thing, a very simple idea.

“Irrespective of your politics, of your culture, of your race, of your whatever, hierdie ding doen ons saam… just South Africans doing one thing together, and recognising that we are a fantastic nation.”

So whether you prefer to call it chisa nyama, ukosa, barbeque (anyone?), or just a braai, Heritage Day has been set aside for you to unite with fellow South Africans around a fire and wave a flag to celebrate the rich and varied cultural heritage of our magnificent and beautiful country.

Flexi-hours deliver efficiency improvements

Flexi-hours deliver efficiency improvements

With a flexible schedule allowing employees to work hours that differ from the conventional company start and stop time, Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, says this approach has had a significant positive impact in the South African market.

“More organisations are adopting flexi-hours as they derive better performance from their employees. For example, flexi-hours are usually coupled with strict daily targets that need to be achieved. If these are not met, flexi-hours are removed,” he says.

Myburgh believes that apart from those who work in the service industry, office hours should not be regulated as flexi-hours contribute to staff happiness. “Not only do staff spend less time in traffic as they can commute when the traffic is lighter, but they also spend less time away from home. Consequently, staff are not as tired and do not burn out easily.”

The technology for implementation flexi-hours on payroll already exist

“Of course, flexi-hours are not a legal requirement. This means that if the system is abused, companies can take away the benefit. Employees therefore need to be responsible and held accountable if such a policy is implemented at the organisation,” he says.

Despite concerns around the implementation of flexi-hours on payroll, Myburgh says the technology already exists to accommodate such a system. For example, a time and attendance system feeds the relevant data into the appropriate database. The hours are logged and the relevant pay calculations made automatically and accurately. This applies even if everyone is working different hours.

From a practical perspective companies still need to ensure there is someone at the office during its core operating hours (usually between 09:00 and 15:00 or from 10:00 to 14:00). Of course, this depends on whether the staff are responsible and do not abuse the system.

“Similarly, if employees do not take advantage of the flexi-time and deliver on their job requirements, the company may consider doing away with core hours altogether eventually. It must be remembered that as long as flexi-hours improve productivity, the system should be embraced.”

The benefits to productivity and efficiency cannot be ignored

According to Myburgh, it really comes down to ensuring there are strict targets in place that must be achieved.

“With the labour law providing for the maximum number of working hours, there should be no impact on implementing flexi-hours. Of course, these flexi-hours must not exceed this maximum amount. There is so much potential for embracing this effectively at an organisation. The benefits to productivity and efficiency cannot be ignored and can be used as additional motivation for employees to complete their work on time and on spec,” he concludes.

SEPTEMBER 2019 – SOUTH AFRICA
NEW VERSION OF PAYE BRS PUBLISHED

It is important that employers note the following:

SARS PAYE BRS for Employer Reconciliation (2019 release) version 18.0.5 published 

The latest SARS PAYE Employer Reconciliation Business Requirement Specification (BRS) was published on Wednesday, 4 September. The requirements in this version of the BRS will become effective from September 2019 until it is replaced by an updated version.

Minor changes regarding discrepancies identified (indicated in red in the BRS) during the BETA testing cycle of the PAYE filing season 2019/2020 were made.

A summary of the sections where changes were made is as follows:

Employer information section:

  • Code 2037 – Diplomatic Indemnity Indicator:
    The wording “years of assessment” has been replaced with transaction year in the sentence “From 2020 transaction year, this field is mandatory”.

Employee remuneration information:

Changes in validation rules.

  • Code 4150 – Reason code for IT3(a) – Reason for non-deduction of tax:
    Value 3 or 03 is only valid if code 3616/3666 or 3620/3670 (code 3690 in previous BRS) has been completed
  • Validation rule “Value 7 or 07 is only valid from 2005 year of assessment and if code 3619/3669 has been completed”, has been replaced with:
    • Value 7 or 07 is [only] valid from 2005 to 2016 years of assessment.
    • Value 7 or 07 is valid from 2017 year of assessment if code 3619/3669 has been completed.

To view the new BRS, follow the link

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2019 C
RS Technologies (Pty)Ltd. All Rights Reserved.

Onboarding a vital element for employee retention

Onboarding a vital element for employee retention

Simply having an onboarding process for new employees is no longer good enough. Ian McAlister, General Manager of CRS Technologies, believes those organisations who make staff feel like valuable resources from the first day at the company can gain critical competitive advantage.

The statistics back this up.

Companies with a strong onboarding process improve new hire retention by 82% and productivity by more than 70%. Unfortunately, only 12% of employees strongly agree that their business does a great job of onboarding. Additionally, most organisations stop their onboarding process after the first week, leaving new hires feeling confused, discouraged, and lacking resources.

Hardly surprising that the Society for Human Resource Management has found that employee turnover can be as much as 50% in the first four months for hourly workers, and 50% in the first 18 months for senior hires. And while a poor onboarding process cannot take all the blame for these figures, putting new appointments on the back foot from the get-go certainly does not help matters.

“Companies can ill afford not to do the basics right when it comes to onboarding. Things like providing a desk, laptop, stationary and so on for relevant appointments are not nice-to-haves but essential tools for the job. A negative onboarding experience can very quickly give a sense of disillusionment and have new staff looking for opportunities elsewhere,” says McAlister.

Process-focus

Effective onboarding programmes not only do the fundamentals right, they also clarify the employee’s role in the business, build confidence in the company, and aid in developing relationships with key staff members.

Onboarding provides a critical link between attracting and hiring a person and making them feel engaged with the organisation. Doing this effectively helps the company fulfil on the promises made during the recruitment and hiring process. It provides a foundation for the employee experience and positions the brand reputation of the organisation to the employee in a very direct way.”

Furthermore, if the onboarding experience is positive, then new hires are likely to recommend the employer to others. Considering how valuable employee referrals are to identify and attract new talent, the value this offers cannot be underestimated.

“During onboarding, the company has the best opportunity to position the culture of the organisation to the new appointment. Many businesses adopt the mantra of people-centricity, but how many implement it when it comes to their internal resources? Mentoring and teamwork done through experiential means are invaluable to make an individual feel part of the company early on.”

A journey

In fact, investing time and resources in identifying the strengths of a new employee are great ways to build a close bond with that person. It shows that the business values the employee as an individual and does not see them as merely a number or cog in a larger wheel.

Generally, new appointees will have more than 50 activities that need to be completed during their onboarding period. This can include everything from signing documents, completing administrative tasks, and delivering certain learning goals during the process.

“Moreover, the potential for complicating the onboarding process is clear. Yet, companies should view it as part of a larger journey the person will be taking with the business. By doing the groundwork when a new hire starts, the company is positioning itself for the potential of a long and fruitful partnership into the future,” McAlister concludes.

The role of the stokvel in the organisation

Role of the stokvel in the organisation

South Africans are well-known for their participation in stokvel saving schemes where members contribute a fixed monthly amount that is paid out to a specific member on a specified date. Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, says employers can integrate these payments into existing processes to make it safer and more convenient for those members.

“With stokvels still an integral part of the lives of many South Africans, employers could offer this as a savings option to employees, as most payroll systems incorporate the functionality to do so. Contributions could be deducted monthly or at predetermined periods, the monies kept in a fund, and then paid out according to processes established,” he says.

Additionally, Myburgh believes that a company can further encourage savings by offering to contribute a small percentage to the fund.

If a business does decide to introduce a stokvel or transfer funds to an established one, it is important to establish a contract between all the parties involved. This should stipulate the amount being contributed, its frequency, how payments are made, when monies (including interest) are paid out, and so on.

“Putting this in place mitigates the risk of either non-contributions or someone running off with the money. However, despite the popularity of stokvels in the country, employees should ask themselves whether their money is not better placed in an investment fund with the interest and other returns directly payable to themselves, rather than sharing it with members of a stokvel.

Education

Even though part of the appeal of a stokvel is the social networking aspect, the employer can still play a key facilitating role.

“A company can initiate the discussion, put options on the table, and establish a structure for the stokvel,” says Myburgh. “Furthermore, it can prepare relevant agreements and advertise the stokvel to the staff. As mentioned, the business can also offer to contribute an amount as an additional incentive.”

The benefit of the employer managing the process means that any pay outs can be done via mobile money transfer, which is especially important for those individuals who do not have bank accounts. Unlike a traditional stokvel where cash is common, a company can find alternative (and safer) ways to distribute funds to members.

Alternative savings vehicles

Looking beyond a stokvel or investment fund, a company can provide its employees with a voluntary savings programme. A percentage of the employee’s salary can be deducted every month and received as a lump sum payment at the end of the year – almost like a 13th cheque or bonus.

Alternatively, if the company already pays a fixed year-end bonus, it can offer to tax employees on this amount in advance on a monthly basis. This enables them to receive a larger amount at the end of the year. However, it is essential that employees sign a form acknowledging that the company may do so. If the employee leaves the company before the bonus is paid out, the onus is on them to claim back the money from SARS.

“The most popular option is for employees to pay an additional voluntary contribution to a provident, pension, or retirement fund and receive a tax benefit on the contribution,” says Myburgh.

All these savings options can help to improve engagement with employees and position the business as a caring employer, a vital competitive advantage in today’s connected environment.

CRS advocates SCARF

CRS advocates SCARF model to employee engagement

CRS Technologies supports the SCARF model to employee engagement as an effective means to boost productivity, agility and operations within a digital business.

Nicol Myburgh, Head of the HR business unit, explains that within the context of employee engagement and the role of staff in business, each SCARF model element can increase or reduce engagement in an interaction.

SCARF stands for Status, Certainty, Autonomy, Relatedness and Fairness,” he explains. “It is significant because it speaks to people development and the internal and external resources employees rely on to develop and work to their full potential.

Status looks at the relative importance of people or how individuals perceive their own worth in relation to other people.

Certainty is about reducing ambiguity. The brain seeks certainty in order to make predictions; it is normal to want to know what will happen.

Autonomy is about the ability to rely on oneself and the perception of having control over an environment.

Relatedness is about connection and a sense of belonging, while fairness is the perception of being treated fairly.

Why is SCARF significant to a digital business?

“Not only does it help decision-makers develop an effective, sustainable employee management strategy, but it also helps employers enforce the strategy and measure the results,” says Myburgh.

“Consider the influence of trends like gamification, based on the application of game design elements in non-game contexts. The SCARF model for employee engagement takes this to a new practical level for businesses and people development.”

To illustrate, gamification brings in point systems and leader boards (status), a clear roadmap and real-time feedback (certainty), control of progress and direction (autonomy), multiplayer environments and teams (relatedness), and unbiased and unfiltered feedback (fairness).

“There is a lot we can learn from trends like gamification in business and how technology can transform systems to develop people,” says Myburgh. “We know an engaged employee is fully in tune with company objectives and operations, and how best to use resources to achieve these objectives. That is what drives a passionate, dedicated member of staff, and what differentiates companies in highly competitive industries in the new economy today.”

By applying the SCARF model with approaches like gamification and other tech-driven business development methodologies, decision-makers can attract, retain and maximise the investment in people.