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SEPTEMBER 2020 – SOUTH AFRICA

UIF TERS
It is important that employers note the following:

Latest communication from the Unemployment Insurance Fund (UIF)

On Monday, 21 September 2020 acting UIF Commissioner Marsha Bronkhorst announced that the UIF plans a payment run for all outstanding payments for April, May and June on the date of the announcement until today, 22 September 2020.

Thereafter the UIF plans to run payments for the period 1 July to 15 August 2020 from 23 to 26 September 2020.

The payments were placed on hold after auditor-general Kimi Makwetu found that poor financial management and verification controls were in place, which resulted in funds being paid out to beneficiaries who were not eligible.

Following the findings, Labour and Employment Minister Thulas Nxesi announced that current UIF commissioner Teboho Maruping would be placed on suspension, along with other fund management members.

The fund has since scheduled multiple payments to fast-track payments this week and has initiated discussions with government departments and agencies to assist in synchronising the data to ensure that COVID-19 TERS payments reach the right and authentic beneficiaries.

Employers are reminded that incomplete forms will not be automatically processed. The process has been made easier for employers to know what is still outstanding through the development of the discrepancy tab in the system. Employers can also use FAQs on the Department of Employment and Labour website.

Employers are reminded of the following closing dates for applications:

·        For 26 March to 31 May: 25 September 2020

·        For 1 June to 30 June: 15 October 2020

·        For 1 July to 15 September: 30 October 2020

No further applications for the respective periods will be accepted beyond the dates specified.

 

 

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2020 C
RS Technologies (Pty)Ltd. All Rights Reserved.

JULY 2020 – SOUTH AFRICA

UIF TERS EXTENDED PERIOD

It is important that employers note the following:

Extension of COVID-19 relief payments to 15 August 2020

On 21 July 2020 the Employment and Labour Ministry announced an extension to the COVID-19 TERS relief payments.

Following the President’s announcement to extend the life of the Disaster Management Act until 15 August 2020, the decision was taken to similarly extend the UIF TERS benefits.

The benefit structure and existing criteria remain the same.

April, May and June applications will be closed at the end of July 2020. Valid applications already received for these months will be processed.

Employees who are put on leave, have been laid off temporarily, or whose employers cannot afford to pay their full salaries due to the coronavirus crisis, are entitled to the benefits.

The maximum amount an employee will receive is R6,730 a month (based on the threshold of R17,700), while the minimum amount is R3,500 a month.

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2020 C
RS Technologies (Pty)Ltd. All Rights Reserved.

JULY 2020 – SOUTH AFRICA

UIF TERS INTRODUCES NEW MEASURES

It is important that employers note the following:

UIF TERS Bank Account Verification

To prevent companies from falling prey to criminal elements, the Unemployment Insurance Fund (UIF) has introduced new and stricter controls to verify banking details.

The fund has received numerous fraud complaints after it emerged that certain individuals managed to change their company’s banking details to their own.

The new rule requires applicants to insert either the enterprise number (CK/CIPC) or the ID number of the bank account holder in the TERS online portal, in order to further verify banking details against the authorised claimant.

This is critical to ensure banking details are verified before any TERS payment is authorised. Failure to do so will lead to more delays in the payment process.

Following the introduction of the new safety and security changes, the fund has had to delay payments. A turnaround time of two days is expected as the funds verifies and validates accounts to ensure that fraud at company level is reduced and eliminated as far as possible.

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2020 C
RS Technologies (Pty)Ltd. All Rights Reserved.

Nicol Myburgh

Taking care of staff in a post-lockdown world

With corporate attention turning to resuming operations in a new normal following the easing of lockdown restrictions, it is important not to neglect employees’ well-being. Nicol Myburgh, Head of the HCM Business Unit at CRS Technologies, believes this transition is a critical time to reinforce the company’s commitment to addressing the physical, psychological, and financial concerns of staff.

“People are social by nature and want to interact with their colleagues. Given how remote working has become part of normal operating procedure, there is a real risk of this aspect of work being lost. If many employees are no longer required to be in a physical office, management must work with HR to implement a different approach, for example regular video calls with remote workers to find out how they are doing on a personal level,” he says.

Counting the cost

Of course, the financial impact of the COVID-19 pandemic has been significant. The introduction of the Temporary Employer and Employee Relief Scheme (TERS), designed to provide financial assistance to employees through Unemployment Insurance Fund (UIF) payments, has proven to be woefully inadequate. Pay-outs (when received) only cover a small portion of income, resulting in employees needing to fix a significant financial gap in their lives.

“Companies must be transparent throughout this period and clearly communicate with employees on the financial realities in which the organisation finds itself. Not many, if any, businesses will be able to afford bonuses or salary increases for the foreseeable future. HR departments need to effectively bring this message across and be the link between management and individuals on expectations for the future,” says Myburgh.

New possibilities

On the positive side, the lockdown has proven to employers that remote work is not only possible, but also eliminates the traditional geographic limitations associated with finding new staff.

“It is now possible to employ full-time staff who might not even live in the same province or country where the company is based. By doing so, the business can develop a regional and even global skills base it might not have even considered as practical prior to the lockdown. However, if an ‘international’ employee is appointed, consideration must be given to the local labour laws and whether the organisation complies with them.”

Irrespective of whether an employer works with local or international staff, a remote working environment does make it difficult to foster a sense of community among employees.

“This is where weekly social discussions become an important tool. Even if this is done virtually, it is good for the organisation to engage with employees on a social level. Beyond that, the company can send care packages to employees at home that can include everything from masks and sanitisers to chocolate and other feel-good items.

It is important to remain cognisant on the support the business provides its employees during these (and other difficult) times. These are matters which help the business become even more competitive in the future,” concludes Myburgh.

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JUNE 2020 – SOUTH AFRICA

SARS PAYE BRS New version 19.04

It is important that employers note the following:

Mauritius Budget Speech Highlights

SARS PAYE BRS for Employer Reconciliation (2020 release) version 19.0.4 published

SARS has released a new version of the PAYE Employer Reconciliation Business Requirement Specifications (BRS). The changes are in respect of the COVID-19 pandemic and the extended Employment Tax Incentives (ETI) requirements.

The update was published on 18 June 2020, even though the date on the BRS indicates that it was released on 28 April 2020. This release includes amended descriptions and validation rules.

Summary of the changes:

Updated descriptions

Allowance code 3724 is to be used for any payment/benefit received from a COVID-19 Disaster Relief Organisation and paid to an employee.

  • Note: This code must NOT be used for benefits received from the UIF Temporary Employees Relief Scheme (UIF TERS).

This resolves the uncertainty regarding source code 3724, which was incorrectly indicated as the code to use for TERS benefits in the previous version of the SARS PAYE BRS.

Deduction code 4030 is applicable to donations deducted from the employee’s remuneration and paid by the employer to an approved organisation or institution. This includes COVID-19 Disaster Relief Organisations but EXCLUDES the Solidarity Fund.

  • Note: A maximum donation to be allowed as a deduction by the employer when calculating the monthly PAYE is 5% of the employee’s remuneration after deducting allowable retirement fund and retirement annuity fund contributions.

The description for deduction code 4055, applicable to COVID-19 Solidarity Fund donations deducted from an employee’s remuneration and paid by the employer to the Solidarity Fund,  was amended to include the changes published in the second revised 2020 Draft Disaster Management Tax Relief (DMTR) Bill:

  • Note: A maximum donation to be allowed as a deduction by the employer when calculating the monthly PAYE is a percentage of the employee’s remuneration after deducting allowable retirement fund and retirement annuity fund contributions over specific months:
    • 33.33% for three months (April, May and June 2020); or 
    • 16.66% for six months (April to September 2020).Amended validation rules

      The validation rules for allowance code 3026 have changed as follows:

      • If ETI employment date is on or after 01/10/2013 and Year of Assessment (YoA) is not 2021 (added);

      The following validation rules for Monthly calculated ETI, code 7004, were amended and/or deleted:

      • If Code 7005 (ETI qualifying 12 month cycle indicator) is 1, 2 or 3 (previously 1 or 2), then this field must be greater than zero;
      • If YoA is 2021 and month (code 7006) is 04, 05, 06 or 07 and ETI qualifying 12-month cycle indicator (code 7005) is 1, then value cannot be greater than R1750,
        Else, if ETI qualifying 12-month cycle indicator (code 7005) is 1, then value cannot be greater than R1000 (deleted);
      • If YoA is 2021 and month (code 7006) is 04, 05, 06 or 07 and ETI qualifying 12-month cycle indicator (code 7005) is 2, then value cannot be greater than R1250,
        Else, if ETI qualifying 12-month cycle indicator (code 7005) is 2, then value cannot be greater than R500 (deleted);
      • If YoA is 2021 and month (code 7006) is 04, 05, 06 or 07 and ETI qualifying 12-month cycle indicator (code 7005) is 3, then value cannot be greater than R750 (deleted).

      To view the the latest BRS containing all the changes, follow the link.

 

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2020 C
RS Technologies (Pty)Ltd. All Rights Reserved.

MAY 2020 – SOUTH AFRICA

COVID-19 AMENDMENT AND CORRECTION OF DIRECTIVES

It is important that employers note the following:

Further amendments to the directive regulating the administration of C19 TERS benefits

Government Gazette 43265, Regulation 11101 No. R 486 was published on 5 May 2020 to further amend the schedule regarding the administration of COVID-19 (C19) TERS.

C19 TERS is a scheme established to compensate employees who will lose income due to the COVID-19 pandemic.

The additional amendments include:

  • The purpose of the directive is to make provision for the payment of benefits to contributors who have lost income as a result of the COVID-19 pandemic. Employees who were obliged to take annual leave in order to receive payment are now also entitled to the benefits.
  • An employer who required an employee to take annual leave during the period of the lockdown may set off an amount received from the UIF in respect of that employee’s COVID-19 benefit against the amount paid to the employee in respect of annual leave, provided that the employee is credited with the proportional entitlement to paid annual leave in the future.
  • To avoid employees visiting the departmental offices for the application of COVID-19 benefits during lockdown, the employer must apply for the COVID-19 benefits on behalf of its affected employees.
  • Employers may not apply for TERS benefits where the employees are entitled to UIF benefits from a bargaining council. The employees are also not entitled to the TERS benefits. The rule was amended by adding that the employer/employee will not be entitled if the employer did not apply for COVID-19 benefits to the UIF nor signed a MOA (memorandum of agreement) with the UIF.
  • To speed up the payment of COVID-19 benefits, employers are also urged to pay employees in line with the calculation of the benefits as set out in clause 3.4 of the directive and reimburse or set off the COVID-19 benefit payments from UIF.

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2020 C
RS Technologies (Pty)Ltd. All Rights Reserved.

MARCH 2020 – SOUTH AFRICA

Updated COVID-19 Temporary Employer and Employee Relief Scheme Information

It is important that employers note the following:

Temporary Employer and Employee Relief Scheme (TERS)

Following the declaration of the COVID-19 pandemic as a national disaster by the President on 15 March 2020, the Minister of Employment and Labour issued a directive called COVID-19 Temporary Employee/Employer Relief Scheme (C19 TERS) on 26 March 2020.

Notice 215 of 2020 from Government Gazette 43161 outlines the steps regarding the administration of C19 TERS.

As a result of the lockdown, companies will have to shut down and employees may be laid off temporarily.  This means that employees are compelled to take leave and may lose income.

Employers are encouraged to continue to pay employees.  Where this is not economically possible, a special benefit under the Unemployment Insurance Fund (UIF) as per the C19 TERS directive has been created.

COVID-19 TERS is a scheme established to compensate employees who will lose income due to the COVID-19.

C19 TERS lost income benefits:

  • Where an employer is forced to close its operations for a 3 (three) month or lesser period as a result of the COVID-19 pandemic, the company will qualify for the relief benefit.
  • The benefit will be delinked from the UIF’s normal benefits, therefore the rule where an employee accumulates one day credit for every 4 (four) days worked will not apply.
  • The benefits will only pay for the cost of the salary for the employees during the temporary closure of the business.
  • The salary benefits will be capped to a maximum amount of R17 712 per month per employee and the employee will be paid in terms of the income replacement rate sliding scale of 38% to 60%.
  • Where an employee’s income replacement sliding scale falls below the minimum wage of the specific sector, the employee will be paid a replacement income equal to the minimum wage of the respective sector.
  • For a company to qualify for the C19 TERS:
    • The company must be registered with the UIF.
    • The company must comply with the application procedure for the financial relief scheme.
    • The company’s closure must be directly linked to the COVID-19 pandemic.

C19 TERS Illness benefit:

  • An employee will qualify for an illness benefit if the employee is in quarantine for 14 (fourteen) days as a result of the COVID-19 pandemic.
  • Both the employee and the employer will be required to submit confirmation that the employee was in an agreed precautionary self-quarantine period of 14 (fourteen) days.
  • Where an employee is quarantined for more than 14 (fourteen) days, a medical certificate from a medical practitioner must be submitted together with the payment continuation form.

Application procedure:

  • Employers must report their closing to Covid19ters@labour.gov.za, whereupon an automatic response will follow, outlining the application process.
  • The following documents will be required:
    • Letter of authority from the company.
    • Signed Memorandum of Agreement (MOA) from the employer or the Bargaining Council.

Employees being paid by their employers during this period are not entitled to the benefits.

The directive comes into operation with immediate effect and will remain in operation for a period of 3 (three) months or until withdrawn by the Minister.

To view the directive, follow the link

 

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2020 C
RS Technologies (Pty)Ltd. All Rights Reserved.

MARCH 2020 – SOUTH AFRICA

COVID-19 Temporary Employer and Employee Relief Scheme

It is important that employers note the following:

Temporary Employer and Employee Relief Scheme (TERS)

The Minister of Employment and Labour has announced measures which the department will put in place to contain the impact of the Coronavirus (COVID-19) pandemic on UIF contributors.

The Unemployment Insurance Fund (UIF) will compensate affected workers through the existing Illness and Reduced Work Time benefits.

The guide is applicable to all employers who are registered with UIF and make monthly contributions as required by the Contributions Act of 2002.

In summary:

  • In terms of the TERS process, the UIF may fund companies affected by COVID-19 directly in relation to the TERS allowance.
  • The affected company will only be funded if it has been compliant with the relevant UIF legislation.
  • Should a company not be compliant, the said company must undertake to pay outstanding contributions and bring its declarations up to date within a stipulated timeframe.
  • The following applications will be considered:
    • Wage subsidy rulings;
    • Over and above wage subsidy and training intervention; and
    • Turnaround solution intervention.
  • Applicants will be expected to provide the following documents:
    • Proof of employment and a list of employees;
    • Salaries of directors;
    • Dedicated bank account;
    • Registration with the Central Supplier Database;
    • Power of attorney;
    • Turnaround strategy implementation plan;
    • Report of progress on the implementation plan.

To view the guide for employers, follow the link

For more information and to obtain application forms, email infoTERS@labour.gov.za

Employee declaration form

Employer declaration form

Contact our legislation team at info@crs.co.za if you require any additional information.
© 2020 C
RS Technologies (Pty)Ltd. All Rights Reserved.

Paid parental leave - SA’s labour law progresses

Paid parental leave and how SA’s labour law progresses

From 1 January 2020 all parents – including fathers of new-born children and mothers of children born through surrogacy – will be entitled to 10 days’ paid parental leave, i.e. up to 66% from the Unemployment Insurance Fund (UIF) or their full salaries at the discretion of their employer, when their children are born.

This is a significant step forward because it reflects a labour law that is in line with requirements of the modern workforce.

We know that South African workers, across various industries and sectors, have long struggled to achieve a credible, sustainable work-life balance. Outdated legislation does not take into consideration the realities of modern family life, for example, the role played by fathers in supporting the arrival of a new baby into the family.

But change is never easy and there are direct implications for both the employee and employer.

Employers have been urged to embrace the spirit of the legislation

While employers have been urged to embrace the spirit of the legislation and could face penalties and action from labour courts should they refuse to adhere to the conditions, employees must take note that paid parental leave can be taken once a year and they must apply officially for leave from their place of employment.

The law makes provision for workers to claim payments from the UIF should the leave be unpaid by their employer.

We also know from media reports that unions like Cosatu (Congress of South African Trade Unions) have voiced their support for the law.

As custodians of HR and HCM related services and solutions, CRS Technologies is available to help.

For any more information and assistance, contact info@crs.co.za

The digital transformation of payroll services has changed the way companies approach this integral back-office function. According to Ian McAlister, General Manager of CRS Technologies South Africa, specialised compensation and remuneration services can help with this transition.

Already, the automation of manual-intensive processes in payroll departments has resulted in staff being refocused on delivering more strategic value to an organisation.

“By taking away much of the admin-intensive functions, automation is giving people more time to review the data at their disposal and develop solutions for customers accordingly. When it comes to payroll, this value can be derived by empowering staff to develop more skills for a digital-friendly environment,” he says.

In certain respects, this more process-centric way of approaching payroll has resulted in a variety of apps and self-service tools emerge empowering organisations to do more with the technology at their disposal.

“Additionally, companies need to find increasingly innovate ways to structure compensation packages. Incentives will be driven by outcomes-based performance instead of the traditional fixed structure of either a 13th cheque, share options, and the like.”

But automation and compensation packages are just two components of a new digitally led payroll environment.

Part of the new digitalisation of payroll entails outsourcing non-core activities (think payroll administration) to specialists as a way of further improving efficiencies and reducing operating expenses. Furthermore, using the right provider, these outsourced solutions still leave the business in a position to manage and plan payroll costs, secure employee benefits, and avoid spending money on purchasing new payroll technology (this is especially relevant to cloud-based solutions that are continually updated).

“Typically, an outsourced service provider should be able to process wages and salary payrolls weekly, fortnightly or monthly. Part of this entails processing confidential and electronic payslips as well as making electronic payments to PAYE (Pay As You Earn), UIF (Unemployment Insurance Fund), and SDL (Skills Development Levy).”

Such a trusted partner would be able to manage any submissions to SARS and assist with package restructurings and any other statutory registrations.

“We live in a time where specialised payroll consultants can add immense value to any business. Their understanding (and likely innovation) of how technology is impacting these processes can fundamentally change how a business approaches this mission-critical function,” McAlister concludes.

Please feel free to contact us or visit our website for more information on taking your payroll into the digital future.

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Email: info@crs.co.za

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