Some South African companies are ‘misusing’ coronavirus funds instead of helping employees: minister
Minister of Employment and Labour Thulas Nxesi says that the Unemployment Insurance Fund has appointed auditors ‘to follow the money trail’ and track whether coronavirus financial relief is being distributed fairly to employees.
Nxesi said that there are already indications that some people and companies have allegedly taken advantage of the help being advanced to workers and are seeking to enrich themselves.
“It is alleged that there are companies that have not paid the workers what is due to them. We are aware of some companies allegedly loaning employees the money and that is not legal.
“We are also aware of other companies that are allegedly paying part of the money and not the full amount, as well as companies using the money for something else other than the intended purpose. If this all this allegations are true, we appeal to companies to do the right thing still,” said Nxesi.
He has also appealed to companies to ensure that they are compliant with the Unemployment Insurance Act adding that, the fund has made payments even in cases where companies are not fully compliant because it did not want to disadvantage workers.
“There are many cases where companies have not declared workers or have not contributed for employees. We will be raising debt against those companies and they must know that they need to pay back with interest and other penalties owed to the UIF.
“It is in all our interest to do the right thing. Even without being compliant, we have done the right thing and still paid them the Covid-19 relief and they also have to do the right thing,” said Nxesi.
To date, an amount of R3.2 billion from the first round of payments remains in abeyance as the Fund awaits further details from employers, to be able to soften the blow for at least 725 791 workers represented by 123,977 employers.
“In as much as some companies have re-opened as a result of the risk-adjusted strategy which has seen the country move to level 3 of the lockdown, we acknowledge that there are still people who would find the injection from the UIF helpful and making a huge difference.
“There are still a number of companies that are either still closed or in dire straits and we hope those workers are not left in destitute,” Nxesi said.
“As government we have committed to ensuring that the worst effects of the pandemic are mitigated through making available a basket of services and other interventions. The UIF has been exemplary in rising to the occasion and helping make the difference,” said the minister.
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