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JANUARY 2020 – SOUTH AFRICA
COMMENCEMENT OF SECTIONS 1 to 7 OF THE LABOUR LAWS AMENDMENT ACT, 2018

It is important that employers note the following:

Commencement of sections 1 to 7 of the Labour Laws Amendment Act 2018 published

Proclamation Government Gazette 42925 No. R. 1699 was published on 23 December 2019 to announce the commencement date of the sections regarding parental leave, adoption leave and commissioning leave.

The sections of the Labour Laws Amendment Act, 2018 which will take effect on 1 January 2020, are as follows:

Section 1:

  • Adding definitions for “adoption order” and “adoptive parent”;
  • Substituting the definition for “employment law” by specifying the employment law as any of the following Acts:
    • The Unemployment Insurance Act, 2001 (Act No. 63 of 2001);
    • The Skills Development Act, 1998 (Act No. 97 of 1998);
    • The Employment Equity Act, 1998 (Act No. 55 of 1998);
    • The Occupational Health and Safety Act, 1993 (Act No. 85 of 1993); and
    • The Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993).
  • Insertion of the definition “prospective adoptive parent”.

Section 2:

  • The payment of maternity benefits will be determined by the Minister subject to the provisions of the Unemployment Insurance Act, 2001 (Act No 63. of 2001).

Section 3:

  • Adding new sections 25A (Parental Leave), 25B (Adoption Leave) and 25C (Commissioning Parental leave) after section 25 of the Basic Conditions of Employment Act, 1997.

Section 4:

  • Section 27 (2)(a) of the Basic Conditions of Employment Act stating “An employer must grant an employee, during each annual leave cycle, at the request of the employee, three days’ paid leave, which the employee is entitled to take when the employee’s child is born”, is repealed.

Section 5:

  • Amending Section 49 of the Basic Conditions of Employment Act, 1997 (A collective agreement concluded in a bargaining council may alter, replace or exclude any basic condition of employment if the collective agreement is consistent with the purpose of this Act and the collective agreement does not -”, by inserting the following paragraphs:
    • (dA) reduce an employee’s entitlement to parental leave in terms of section 25A;
    • (dB) reduce an employee’s entitlement to adoption leave in terms of section 25B;
    • (dC) reduce an employee’s entitlement to commissioning parental leave in terms of section 25C.

Section 6:

  • Amending Section 83(1) of the Basic Conditions of Employment Act, by adding subsection 1(a) and (1)(b) as follows:
    • ‘‘(1) The Minister may, on the advice of the Commission and by notice in the Gazette, deem any category of persons specified in the notice to be: –
      (a) employees for purposes of the whole or any part of this Act, any other employment law other than the Unemployment Insurance Act, 2001 (Act No. 63 of 2001), or any sectoral determination; or
      (b) contributors for purposes of the whole or any part of the Unemployment Insurance Act, 2001 (Act No. 63 of 2001).’’.

Section 7:

  • Inserting definitions for “adoption order” and “prospective adoptive parent”.

NOTE:
It is important that employers note the following
:

  • As from 1 January 2020, all employees are entitled to the three new leave types (employers must allow employees the leave), i.e. parental leave, commissioning parental leave and adoption leave, as stipulated in the amended BCEA.
  • However, UIF can only be claimed for parental benefits from 4 November 2019, and for Commissioning Parental benefits from 1 April 2020, according to the Unemployment Insurance Act Regulations.
  • Therefore, should an employee make use of commissioning parental leave prior to 1 April 2020, the benefits will not be paid by the UIF.
  • The effective date for claiming adoption leave benefits has not yet been published.

Should an employer grant adoption leave or commissioning parental leave to an employee, either the employer must pay for the leave or it will be unpaid leave.

To view the Proclamation in Government Gazette No. 42925, follow the link

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.

NOVEMBER 2019 – SOUTH AFRICA
THE UNEMPLOYMENT INSURANCE ACT REGULATIONS

It is important that employers note the following:

Amendment of the Unemployment Insurance Act Regulations

The Minister of the Department of Employment and Labour has amended the regulations in the Schedule of the Unemployment Insurance Act Regulations. The amendments were published on 4 November 2019 in Government Notice No. R. 1421 of Government Gazette No. 42821.

The following amendments have been made:

  • Regulation 5A has been inserted after regulation 5 of the regulations.
    Regulation 5A refers to the application for parental benefits and came into effect on 4 November 2019
  • Regulation 5B has been inserted after regulation 5A of the regulations.
    Regulation 5B refers to the application for commissioning parental benefits and will come into effect on 1 April 2020.
  • Regulation 6(f) has been inserted after paragraph (e) of sub-regulation (2).
    Regulation 6(f), regarding adoption benefits, refers to an interim court order placing the child in the care of the prospective adoptive parents, pending the finalisation of an adoption order in respect of that child, and will come into effect on 1 April 2020.

Amended and new forms:

  • Forms 2.1, 2.2, 2.3, 2.4, 2.5, 2.6; 2.7, 2.8, 19 and 53 have been substituted for the evenly numbered forms in the Annexure in the Amendment of the Unemployment Insurance Act Regulations.

New forms 2.1P, 2.2P, 2.3P, 2.4P, 2.9P, 2.12P, 2.9 and 2.12 have been added to the Amendment of the Unemployment Insurance Act Regulations.

 

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.

JANUARY 2020 – SOUTH AFRICA

OFFICIAL INTEREST RATE

It is important that employers note the following:

SOUTH AFRICA

Reduction of official interest rate announced

The Monetary Policy Committee (MPC) of the South African Reserve Bank has decided to reduce the repo rate. The announcement was made on Wednesday, 16 January 2020.

The repo rate is reduced by 25 basis points to 6,25% per year, effective from 17 January 2020. This means that the rate at which the SARB lends to your bank has decreased from 6,5% to 6,25%.

For employers, the official interest rate applicable to payrolls will be 7,25%, taking effect on 1 February 2020.

The definition of “official interest rate” in the Seventh Schedule of the Income Tax Act means:

  • In the case of a loan which is denominated in the currency of the Republic, the South African repurchase (repo) rate + 100 basis points; or
  • In the case of a loan which is denominated in any other currency, the South African repurchase rate applicable in that currency + 100 basis points.

Where a new repurchase rate or equivalent rate is determined, the new interest rate applies for the purposes of this definition from the first day of the month following the date on which that new repurchase rate or equivalent rate comes into operation.

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.

NOVEMBER 2019 – SOUTH AFRICA
EXPLANATORY SUMMARY OF THE TAX ADMINISTRATION LAWS AMENDMENT BILL, 2019

It is important that employers note the following:

Publication of the Explanatory Summary of the Tax Administration Laws Amendment Bill, 2019

Government gave notice that the Minister of Finance intends to introduce the Tax Administration Laws Amendment Bill, 2019 to the National Assembly soon. An explanatory summary of the Bill was published in accordance with the Rules of the National Assembly.

The Bill provides for the amendment of the Income Tax Act, 1962; Customs and Excise Act, 1964; Value Added Tax Act, 1991; Skills Development Levies Act, 1999; Unemployment Insurance Contributions Act, 2002; and the Tax Administration Act, 2011.

Short overview of the changes:

  • Income tax Act: To make technical corrections; to remove a requirement to submit a declaration to a regulated intermediary in respect of tax free investments; to clarify that a penalty may be imposed if an employer submits an incomplete return; and to insert a provision that an executor need not submit a provisional tax return for the provisional period ending on the date of death.
  • Value-Added Tax: To make technical corrections; to remove a requirement that the Minister of Finance must prescribe the particulars to be contained on a tax invoice issued by a foreign supplier of electronic services; and to clarify that rulings under the Act are not subject to the prescribed fee under the Tax Administration Act, 2011.
  • Skills Development Levies Act: To make technical corrections; to provide for a procedure if an employer has incorrectly indicated the jurisdiction of a SETA; and to align the time periods for a refund under the Act with the Tax Administration Act, 2011.
  • Unemployment Insurance Contributions Act: To align the time periods for a refund under the Act with the Tax Administration Act, 2011.
  • Tax Administration Act, 2011: To make technical corrections; to extend the notice period prior to the institution of legal proceedings; to clarify that an assessment or decision is final if an appeal is withdrawn; to clarify when SARS may make an assessment based on an estimate if no return is submitted or required; and to align the provisions regulating the tax compliance status of a taxpayer with the automation thereof.

To view the government notice, follow the link

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.

OCTOBER 2019 – SOUTH AFRICA
COMMENCEMENT OF SECTIONS OF THE LABOUR LAWS AMENDMENT ACT, 2018

It is important that employers note the following:

The commencement date of some sections of the Labour Laws Amendment Act, 2018

Proclamation No. R 56 of 2019 was published in Government Gazette No. 42805 on 29 October 2019 to announce the commencement date of the sections regarding the new Parental leave and Commissioning Parental leave.

This means that employees can start making use of the parental and commissioning parental leave as from 1 November 2019.

The sections of the Labour Laws Amendment Act, 2018 which will take effect on 1 November 2019, are as follows:Section 8(a)(cA): Section 12 of the Unemployment Insurance Act, 2001, is amended by adding parental benefits and commissioning parental benefits.

    • Section 8(a)(cA): Section 12 of the Unemployment Insurance Act, 2001, is amended by adding parental benefits and commissioning parental benefits.
    • Section 11: The right to parental benefits is inserted in the Unemployment Insurance Act, 2001, after section 26.
    • Section 15: Section 58 of the Unemployment Insurance Act, 2001, is amended by adding parental and commissioning parental benefits in subsection (12)(c).
    • Section 16: The title of the Unemployment Insurance Act, 2001, is amended by adding parental and commissioning parental benefits to be provided for, for payment from the Fund.

To view the Proclamation in Government Gazette No. 42805, follow the link

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.

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.
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RS Technologies (Pty)Ltd. All Rights Reserved.

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.
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RS Technologies (Pty)Ltd. All Rights Reserved.

The draft Taxation Laws Amendment Bill 2019 published for comments

On 10 June 2019 National Treasury published the initial batch of the draft Taxation Laws Amendment Bill 2019 for public comments. The full text of the 2019 draft Taxation Laws Amendment Bill will be published for public comment in mid-July 2019.

This initial batch is intended to ask for comments on two specific amendments that are more urgent and require further consultation. Written comments on the initial batch of the 2019 draft Taxation Laws Amendment Bill are due on 25 June 2019.

The two amendments referred to, are:

Aligning the effective date of tax neutral transfers between retirement funds with the effective date of retirement reforms, which is

1 March 2021.

  • In 2013, retirement fund reform amendments were effected to the Income Tax Act regarding the annuitisation requirements for provident funds. The main purpose of these amendments was to improve the protection of retirement fund interests during retirement, resulting in provident funds being treated similarly to pension and retirement annuity funds with regard to the requirement to annuitise retirement benefits.
  • These amendments were originally intended to come into effect on 1 March 2015, however, further negotiations within NEDLAC have not been finalised, resulting in the effective date for the annuitisation requirements for provident funds being postponed to 1 March 2021.
  • Each postponed requires several amendments to various provisions of the Income Tax Act. One change was accidentally left out in paragraph 6(1)(a) of the Second Schedule to the Income Tax Act, which makes provision for tax neutral transfers between retirement funds.
  • To correct this, it is proposed that urgent changes be made to the Income Tax Act to align the effective date.

Addressing abusive arrangements aimed at avoiding the anti-dividend stripping provisions.

  • This amendment is not applicable to Employers/Employees.

Click  here to view the media statement
Click  here to view the initial batch of the draft Taxation Laws Amendment Bill 2019
Click  here to view the Explanatory Memorandum

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2019 CRS Technologies (Pty)Ltd. All Rights Reserved.

 

Tax Return Threshold increased from R350 000 to R500 000

On Tuesday, 4 June, the SARS Commissioner, Edward Kieswetter announced that SARS has increased the tax return threshold from R350,000 per annum to R500,000 per annum.

This means that only people whose total employment income before tax is more than R500,000 per year will need to file their tax returns.

However, there are other elements to consider meeting the criteria. For this threshold to apply, ALL of the following criteria must be met:

  • The total employment income for the year before tax is not more than R500 000.
  • You only receive employment income from ONE EMPLOYER for the full tax year.
  • You have no other form of income, e.g. car allowance, business income, and rental income, taxable interest or income from another job.
  • You don’t have any additional allowable tax-related deductions to claim, e.g. medical expenses, retirement annuity contributions and travel expenses.

Taxpayers who file their income tax returns at a SARS branch, can do so from 1 August 2019.

Taxpayers who are registered for eFiling or have access to the MobiApp can file their income tax returns from 1 July 2019.

The closing dates for Tax Season are as follows:

  • 31 October 2019 for branch filing.
  • 4 December 2019 for non-provisional taxpayers who use eFiling and the MobiApp.
  • 31 January 2020 for provisional taxpayers who use eFiling.

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2019 CRS Technologies (Pty)Ltd. All Rights Reserved.

 

Unemployment Insurance Fund (UIF) in the process of finalizing the development of systems to implement Parental and Commissioning Parental benefits

On 23 November 2018 President Cyril Ramaphosa signed the Labour Laws Amendment Bill into Act, thus effecting amendments to the Basic Conditions of Employment Act and the Unemployment Insurance Act of 2001.

Although the Labour Laws Amended Act 2018 is now law, the benefits will only take effect once the president has promulgated the implementation date.

The UIF Commissioner said as Parental and Commissioning Parental benefits are new, the UIF has started to upgrade their systems, develop regulations, and design new forms for the processing of applications.

The UIF should be ready to implement these benefits by September 2019.

Some companies have started to implement parental leave in line with the Labour Laws Amendment Act; however, UIF will only start accepting applications and process payments once the president has promulgated the implementation date.

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2019 CRS Technologies (Pty)Ltd. All Rights Reserved.