Employees not being paid during the coronavirus lockdown – here’s how to apply for funding

The Department of Labour has published new regulations which outline South Africa’s new Covid-19  Temporary Employee/Employer Relief Scheme (TERS).

The regulations note that during the country’s 21-day lockdown, companies will have to shut down and employees laid off temporarily.

This means that employees are compelled to take leave, which is not out of choice, and employees are likely to lose income.

While employers are encouraged to continue to pay employees, where this is not economically possible, the Department of Labour says it has created a special benefit under the Unemployment Insurance Fund (UIF) as per the TERS.

How the scheme works 

  • Should an employer as a direct result of Covid-19 pandemic close its operations for three months or lesser period and suffer financial distress, the company shall qualify for a Covid-19 Temporary Relief Benefit;
  • The benefit shall be delinked from the UIF’s normal benefits and therefore the normal rule that for every four days worked, the employee accumulates a one day credit and the maximum credit days payable is 365 for every four years will not apply;
  • The benefits will only pay for the cost of salary for the employees during the temporary closure of the business operations;
  • The salary benefits will be capped to a maximum amount of R17,712 per month, per employee and an employee will be paid in terms of the income replacement rate sliding scale (38%-60%) as provided in the Unemployment Insurance Act;
  • Should an employee’s income determined in terms of the income replacement sliding scale fall below the minimum wage of the sector concerned, the employee will be paid a replacement income equal to the minimum wage of the sector concerned;
  • For the company to qualify for the temporary financial relief scheme, it must be registered with the UIF, must comply with the application procedure for the financial relief scheme, and the company’s closure must be directly linked to the Covid-19 pandemic.

Illness benefit 

Where an employee is in quarantine for 14 days due to Covid-19 pandemic, the employee shall qualify for illness benefit.

In terms of the regulations:

  • Confirmation from both the employer and the employee must be submitted together with the application as proof that the employee was in an agreed precautionary self -quarantine for 14 days;
  • In this instance, the confirmation letters from the employer and employee shall suffice;
  • Should an employee be quarantined for more than 14 days, a medical certificate from a medical practitioner must be submitted together with continuation form for payment

How to apply

Employers can apply by reporting their closure by emailing [email protected] and there shall be an automatic response outlining the application process.

Employers will be required to furnish the Unemployment Insurance Fund with the following completed documents:

  • Letter of authority from the company;
  • Signed Memorandum of Agreement (MOA) from the employer or Bargaining Council with the UIF.

It should be noted that an employee who is being paid by the employer during this period is not entitled to this benefit.

You can read the full regulations below:

Temporary Employee/Employer Relief Scheme (TERS) by BusinessTech on Scribd

Read: New website rules for South Africa during the coronavirus outbreak

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Employees not being paid during the coronavirus lockdown – here’s how to apply for funding