OCTOBER 2019 – SOUTH AFRICA
MEDIUM TERM BUDGET STATEMENT

It is important that employers note the following:

South Africa Medium-Term Budget Policy Statement 2019

The Minister of Finance, Minister Tito Mboweni, delivered the Medium-Term Budget Policy Statement on Wednesday, 30 October 2019.

Fiscal goals and projections for the economy, as well as the risks facing the country were addressed.

Highlights summarised

  • Economic growth is forecast at 0.5% in 2019 compared to the 1.5% expected in February. Growth is projected to slowly rise to 1.7% in 2022.
  • E-tolls are here to stay, and the government plans to enforce compliance
  • Total revenue shortfall for 2019-2020 will amount to R52.5 billion compared with the 2019 Budget estimates. This could result in job losses, lower wage settlements, smaller bonuses and a decline in income tax collection.
  • Tax collection is expected to total R1.37 trillion this year, which is R53 billion (or 4%) less than expected.
  • National debt exceeded R3 trillion. It is expected to rise to R4.5 trillion over the next three years. Without any policy adjustments, debt will most likely exceed 71% of GDP by 2022/2023.
  • The National Treasury, in partnership with the Department of Public Enterprises, is instituting a series of measures to instil discipline in Eskom’s finances. Debt relief will only be considered once operational efficiencies have been achieved.
  • The consolidated budget deficit averages 6.2% of GDP over the next three years.
  • Regarding economic growth, the current account deficit is expected to remain at 3.5% of GDP over the next three years, reflecting low import growth due to weaker domestic demand.
  • Almost half of all projected spending is allocated to social grants, education and healthcare, which will receive R3 trillion alone over the next three years.
  • The rollout of the National Health Insurance (NHI) Bill will require an additional R33 billion annually from the 2025/26 financial year. Treasury and the health department are still in discussions around NHI.
  • Luxury expenses are being withdrawn from politicians. This includes salary freezes, cuts in taxpayer-funded cars, clamp downs on expensive phones, no more business class flights and restrictions on travel and subsistence expense claims.
  • R2.3 billion will be allocated to fighting crime and tax avoidance.
  • The South African Reserve Bank will not be nationalised as it kept inflation stable during a difficult period. The bank also declared a substantially increased profit share to the government.
  • The official unemployment rate has increased to 29%, up from 27% a year ago.
  • The mid-term Policy Statement does not include detailed spending plans or tax proposals. This will be announced during the annual Budget Speech in February 2020.

To view the Medium-Term Budget Policy Statement (MTBPS), 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.

CRS assists SARS-embattled clients with tax advisory service

How CRS assists SARS-embattled clients with tax advisory service

In the current economic climate many cash-strapped businesses find themselves unable to pay their outstanding tax debt to SARS. Some try to put the problem on hold by not submitting a tax return, but according to Ian McAlister, General Manager of CRS Technologies, not only are the penalties for doing this severe and the interest charges really high, it’s also illegal.

“CRS has recently encountered new clients who’ve fallen foul of SARS through inadequate legislation and compliance assistance from their payroll supplier. Our solution was to forge an alliance with Tax Debt Compliance which offers a range of tax relief mechanisms that quickly puts the company back on track. Thereafter the way forward is painless.”

The tax relief mechanisms include:

  • Negotiation of affordable instalment agreements with SARS on behalf of the business;
  • Compromise applications to SARS which, if approved, will enable the business to settle tax debt at a reduced amount;
  • Tax due diligences to ensure compliance with South African tax legislation;
  • Formulation of tax opinions for businesses considering entering into complex transactions that could hold significant tax consequences.

Clients retain their assets and maintain their business operations

“The team at Tax Debt Compliance have many years of experience in this field,” McAlister continues. “To date, the company boasts a 100 per cent success rate in which it has helped numerous clients retain their assets and maintain their business operations.

“Companies can now focus on running their business with the peace of mind that their legislation, compliance and tax issues are in the capable hands of CRS Technologies and Tax Debt Compliance,” he concludes.

For more information, contact CRS by:  clicking here

 

OCTOBER 2019 – LESOTHO
INCOME TAX CREDIT CHANGE

It is important that employers note the following:

Changes to the Second Schedule in the Income Tax Act 1993 – Annual Tax Credit

Legal Notice 84 of 2019 was published on 3 October 2019 regarding changes to the Second Schedule in the Income Tax Act 1993 (as amended) and became effective on 1 October 2019.

The law provides for an individual to be granted a non-refundable tax credit. A tax credit is a rebate or relief granted by law to individuals who made taxable income for the year of assessment. It is directly deductible from the amount after applying the applicable marginal tax rates to the chargeable income. The non-refundable tax credit has been increased from M7,260 to M9,600 per annum, effective 1 October 2019.

No changes were made to the lower tax threshold.

To view the legal notice, 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.

OCTOBER 2019 – ZAMBIA
NEW NATIONAL HEALTH INSURANCE FUND

It is important that employers note the following:

National Health Insurance Fund Implementation

Following the approval of the National Health Insurance Act, 2018 in April 2018, the implementation thereof has been delayed while awaiting the publication of the Statutory Instrument indicating the regulations and effective date.

Statutory Instrument (SI) No. 63 of 2019 was published on 20 September 2019, announcing the effective date as 1 October 2019.

Registering
An employer must register an employee with the National Health Insurance Management Authority as a member. To register an employee, Form I as set out in the First Schedule of SI No. 63 must be used.

An employee means any person who has entered into or works under a contract of service, whether the contract is expressed or implied, is verbal or in writing, and whether the remuneration is calculated by time or work done or is in cash or kind.

Persons employed under a contract of apprenticeship made in accordance with the Apprenticeship Act, or a casual employee cannot be registered as a member.

Contributions
An employer must pay to the scheme a contribution consisting of the employer’s contribution and the employee’s contribution at the rates below (as set out in the Third Schedule of the SI):

Reporting

  • Employee: 1% of the basic salary
  • Employer: 1% of the basic salary

An employer must pay, on or before the 10th of the following month, the contributions deducted in a month.

The specifications regarding the reporting is not set out in the SI, therefore it is recommended that the following information be reported:

Employer:

  • Business or company name
  • NHIMA identification number
  • Employer type
  • Physical address
  • Date of registration
  • Number of employees
  • Contact details – phone and email

Employee:

  • Surname
  • First name
  • Other names
  • Employment number
  • NRC or passport number
  • Membership number
  • Date of birth
  • Sex
  • Marital status
  • Occupation
  • Engagement date with current employer
  • Basic salary
  • Contribution

For more information, visit the Ministry of Health website

 

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

CRS Engage platform builds a more engaged workforce

How the CRS Engage platform builds a more engaged workforce

Human capital management specialist CRS Technologies has launched its employee engagement solution, Engage, which is designed to provide organisations with an innovative resource management and reporting platform.

Engage empowers HR practitioners with the insights required to ensure employees are aligned with the company purpose by clearly defining their roles to accomplish it. It features a full designation library with standard job descriptions that can be customised according to business requirements.

Research indicates that customers’ experience of a business begins with how its employees experience it,” says Ian McAlister, General Manager at CRS Technologies. “By creating an engaged workforce, the business can deliver on the moments that matter and gain significant differentiation in a highly competitive market.”

More geared towards creating an employee experience

As such, HR has become less about implementing processes and is today more geared towards creating an employee experience that drives sustainable business performance.

“Companies need to find new ways of tapping into the potential of their workforce,” says McAlister. “They require a platform that allows them to easily set goals and expectations while having real-time insights into performance reporting. This means having complete transparency about the obstacles employees face and finding more effective ways to overcome them. This is the true value that Engage delivers.”

At a fundamental level, Engage reimagines the employee experience in a digital-centric way. This means giving them access to an easy-to-use interface on their smartphones where they are not only able to manage leave, access pay slips and so on, but also track their performance. “This ensures employees always have sight of what must be achieved, include insight into areas of their jobs where they can improve and better align to the broader organisational strategy,” says McAlister.

Keeps employees motivated and aligned

Team performance and management for short-term and ad hoc projects can be easily tracked, providing employees and management with all the relevant information at a glance. This creates a healthy, competitive environment internally where teams will strive to reach their respective goals faster and more effectively.

“Giving employees this information keeps them motivated and aligned with the overarching organisational vision. They feel more in control of what must be accomplished and how to do so. Additionally, a platform like Engage can deliver better employee commitment, resulting in reduced staff turnover. It is all about taking care of the organisation’s most valuable asset – its people,” says McAlister.

The CRS Engage platform is available for demonstration with more details – contact us by clicking here.

OCTOBER 2019 – SOUTH AFRICA
EMPLOYMENT EQUITY AMENDMENT BILL 2018 UPDATE

It is important that employers note the following:

Employment Equity Amendment Bill 2018 expected to be tabled soon

Currency reforms

In a statement delivered by the Commission for Employment Equity (CEE) on Wednesday, 9 October, the CEE said that the bill is expected to be tabled in parliament before the end of October 2019 to further establish and increase transformation in the workplace.

The Employment Equity Amendment Bill, 2018 and the Draft Employment Equity Regulations, 2018 were published for public comment for 60 days from 21 September 2018 to 20 November 2018.

The amended Employment Equity Bill would empower the Labour Minister to regulate sector-specific employment equity targets and promulgate Section 53 of the Act to enable the issuing of Employment Equity compliance certificate as a prerequisite for accessing state contracts.

A summary of the proposed changes include:

The definition of a “designated employer” changes by removing paragraph (b) of the definition: “(b) a person who employs fewer than 50 employees but has a total turnover that is equal to or above the applicable annual turnover of a small business in terms of Schedule 4 of this Act”.

In short, this means that all employers with less than 50 employees will be excluded from Chapter 3 of the Employment Equity Act, No. 55 Of 1998 (Affirmative Action) and will no longer have to submit an annual Equity plan.

The following definition is inserted after the definition of “Minister”: National Minimum Wage Commission means the Commission established in terms of the National Minimum Wage Act, 2017 (Act No of 2017)

The following definition is inserted after the definition of “Republic”: sector means an industry or service or part of any industry or service

The following definition is inserted after the definition of “suitably qualified person”: “the state means-

  • A national or provincial department as defined in the Public Finance Management Act, 1999 (Act 1 of 1999);
  • A municipality or municipal entity as defined in the Local Government Municipal Systems Act of 2000 (Act 32 of 2000);
  • A constitutional institution as defined in the Public Finance Management 1999 (Act, 1999 (Act 1 of 1999);
  • Parliament;
  • A provincial legislature;
  • Any entity listed in Schedule 2 and 3 of the Public Finance Management Act of 1999 (Act 1 of 1999).”

Section 14 of the principal Act (Voluntary Compliance) is deleted. This means that in terms of section 53 (State Contracts), employers with less than 50 employees will no longer be able to participate in a government tender, however, small employers can still be issued with a Certificate of Compliance to enable them to do business with Government, provided they comply with Chapter 2 of the EE Act (Unfair Discrimination) and the National Minimum Wage Act.

A new subsection, section 15A has been added to Chapter 3, Section 15 (Affirmative action measures) of the Act. Section 15A (Establishment of sectoral targets) has been added to specify numerical targets for any sector or part of a sector. This means:

  • The Minister may publish a notice in the Gazette identifying national economic sectors for the purposes of the EE Act, having regard to any relevant code contained in the Standard Industrial Classification of all Economic Activities published by Statistics South Africa.
  • The Minister may, by notice in the Gazette, set numerical targets for any sector or part of a sector identified. The notice issued may set different numerical targets for different occupational levels or regions within a sector or on the basis of any other relevant factor.

The Minister may also issue regulations prescribing the criteria to be considered in determining a numerical target.

Section 53 (State Contracts) of the EE Act is amended by the insertion of a new subsection (6) which states:

  • “The Minister may only issue a certificate in terms of subsection (2) if the Minister is satisfied that the employer:-
    (a) has met any sectoral targets in terms of section 15A that applies to it or has provided reasonable grounds, as contemplated by section 42(4), justifying its failure to comply;
    (b) has submitted a report in terms of section 21;
    (c) has not been found by the CCMA or a court within the previous twelve months to have:-
    (i) breached the prohibition on unfair discrimination in Chapter 2; or
    (ii) failed to pay the national minimum wage in terms of the National Minimum Wage Act, 2017 (Act of 2017).”

To view the Employment Equity Amendment Bill 2018, 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.

CRS delivers the A-Z of HR as easy as 1-2-3

The A-Z of HR as easy as 1-2-3

Businesses are turning to outsourced service providers to help them manage human capital management (HCM) compliance and unlock the value of their people investment. CRS Technologies’ A-Z of HR services helps to simplify this process.

The HR function in business is becoming increasingly complex. Legislative and regulatory requirements are only some of the facets falling within the broader HCM function. There is also the need to understand various technology systems, changes in labour law, on-site and off-site administration, as well as recruitment.

Even though some might view HR departments as only focused on managing leave and other administrative matters, it is more complex than that.

Effective employee recruitment and hiring

The HR department may not generate revenue, but it is critical to operations through its contribution to expenditure savings, which encompasses effective employee recruitment and hiring, learning and development, and performance management.

Obviously, not all businesses possess all the skill sets necessary to address every HR requirement or do so consistently. This is where experienced service providers are essential. CRS’s full spectrum of HR services, which includes legislative compliance, is geared to lowering the risk associated with human capital and maximising return on investment.

Its A-Z of HR services is an alphabetic listing of every service available through the company.

CRS takes a holistic approach to HR, empowering managers with cost-effective solutions and services that enhance the efficiency of this environment, making it an asset that continuously adds value to the entire organisation.

The A-Z a novel way of communicating exactly what we do for the market

The A-Z encompasses everything from audits of contracts and policies to zero tolerance policies and procedures. It also includes Employment Equity Act compliance, industrial relations specialisations, labour legislation advice, qualification verification, recruitment services and retrenchments, among others.

Not only is this A-Z a novel way of communicating exactly what we do for the market, it is also a practical guide for anyone looking for a specific service.

And because it is an outsourced offering, clients can supplement, complement, or even replace their HR administrative processes, thus optimising the balance between internal control and delegation while reducing expenditure.

By leveraging the services of our HR experts, companies can enhance, clarify and enforce policies and procedures to improve employee job satisfaction and performance.

Managing a multi-generational workforce

Addressing the challenges associated with managing a multi-generational workforce

Each generation has different work expectations. How can organisations address this challenge effectively without compromising on its core values? Nicol Myburgh, Head of the HR Business Unit at CRS Technologies, believes that while a standardised approach is ill advised, there are other opportunities to become more attentive to the requirements of a multi-generational workforce.

“Every generation has its own value system and way of working,” he explains. “Some of the millennial value drivers include receiving praise, being rewarded for participating, and the need to feel valued. Baby Boomers have a strong work ethic, are competitive, self-assured and independent, and unafraid of a hard day’s work.”

“Some might argue that one of the reasons behind these differences is that Baby Boomers had to work hard for everything they achieved and did not want their children to go through the same struggles they experienced. Consequently, they gave their children everything they wanted. Unfortunately, this cultivated a sense of entitlement.”

“Managing these differences can be extremely challenging. Baby Boomers sometimes view Millennials as being disrespectful even though the latter might not feel this is the case. Another example is that Baby Boomers were taught that it is essential to acknowledge mistakes made and as far as possible, correct them. Millennials, on the other hand, look for ways to hide their mistakes.”

Changing ways

Despite the criticism millennials face, one of the most often overlooked benefits of the new generation is that they can teach themselves.

Millennials rely heavily on sites such as YouTube to acquire skills they do not have when they need them. This can be something as simplistic as changing a flat tyre or more complex such as servicing a car. This negates the need for formal qualifications or having to rely on another expert to teach them.

“It’s simply a matter of doing a quick search online to find out how to do something,” says Myburgh. “Of course, there needs to be an understanding of how to effectively search for something online and which paths to follow to get the results in the shortest time possible.”

Separation anxiety

The evolution of technology has also resulted in the creation of a mobile workforce.

This means the various generations can be physically separated from one another. It is also an effective way of avoiding confrontations that could develop as a result of differing value systems, approaches to work, and so on.

Typically, older generations prefer their own office, while millennials enjoy working in an open plan environment.

“But even though splitting the generations might be an effective tactic, decision-makers should focus on teaching the different groups to respect one another’s differences and focus instead on their respective strengths,” Myburgh points out. “Creating a more collaborative work environment will bring its own benefits, especially as companies look to digitally transform themselves. Linking the generations together might just be the best way to do so.”

The impact of cannabis in the workplace

The impact of cannabis in the workplace

Even though the use of cannabis in the home is now legal, the potential exists for employees to arrive at work under the influence. Most company policies cater for the use of illegal substances while at work, but these need to be updated to reflect the new regulations, says Nicol Myburgh, Head of the HR Business Unit at CRS Technologies.

Studies have shown that cannabis can affect an employee’s occupational capacity in various ways. This includes performing tasks more slowly, performing poorly when handling routine, monotonous tasks, and difficulty in multi-tasking, taking instructions from superiors, making crucial decisions and operating machinery and/or motor vehicles.

“This means that, as with alcohol usage, companies can legally prohibit employees from taking cannabis in the workplace. After all, it’s their company and they control the rules. It is therefore important to include these restrictions in a policy, employment contracts, or even enforce it as a standard rule,” he says.

“Even if a business does not have a policy explicitly prohibiting this, action can still be taken against someone who smokes cannabis at the office, because common sense dictates it is not acceptable behaviour,” Myburgh adds.

Taking the test

What happens if an employee uses cannabis at their private residence and arrives at the office under the influence?

“From a policy perspective, there is no difference between taking cannabis and drinking at home. Consequently, the approach is the same as if the employee arrived at work under the influence. Of course, the challenge lies in proving that the employee is under the influence of cannabis while at work. Fortunately, there are various tests available that can detect the substance for months after use, and a saliva test can identify cannabis in the system for up to 24 hours.”

Myburgh points out, however, that even if a saliva test shows positive for cannabis, this does not necessarily mean that the employee is unable to work. “The test has merely proved that the employee used cannabis in the last 24 hours, which in itself is not an offence. The employee is only guilty if it can be proven that he or she is under the influence of cannabis.”

And while alcohol has a legal limit associated with its use, a saliva test for cannabis does not measure the extent to which the substance affects a person.

Legal route

“Criminal law dictates that a crime must be proven beyond reasonable doubt, but labour legislation relies on the balance of probabilities,” Myburgh continues.

For example, if an employee arrives at work showing clear symptoms of being under the influence of cannabis, and a saliva test proves usage over the last 24 hours, based on the balance of probabilities, the chain of events will in all likelihood lead to a guilty verdict and the employee could be dismissed.

Changing environment

Medical testing of employees remains regulated by Schedule 7 of the Employment Equity Act, which states: “Medical testing of employees is permitted if it is justifiable in light of medical facts, employment conditions, social policy, the fair distribution of employee benefits and inherent requirements of the job.”

It could be argued that it is an inherent job requirement to not be under the influence of any mind-altering substance, making the case for cannabis testing.

“A company could therefore legally require employees to undergo a test that could potentially strengthen its position in a disciplinary hearing, but this does not necessarily mean the company will be able to dismiss the employee, even if he or she tests positive. It all depends on the accompanying symptoms.”

Workplace policies should explicitly state the repercussions for arriving at the work under the influence, whether this is from alcohol usage, cannabis, or any other mind-altering substance.

“Considering that cannabis is no longer an illegal drug, company policies must be adapted to encompass employees being under the influence of mind-altering substances. Alternatively, the alcohol usage policy should be expanded to include cannabis,” Myburgh concludes.