New laws for domestic workers in South Africa – important deadline for all employers hitting this month

 ·1 Jun 2023

The Department of Employment and Labour has extended the deadline for employers to submit the necessary documentation to ensure their employers are covered for workplace injuries.

A big change for South Africa is that domestic workers are now considered formal employees under the Compensation for Occupational Injuries and Diseases Act (COIDA) – meaning that anyone employing a domestic worker must comply with the relevant laws.

The changes were signed into law in April 2023, giving a massive boost to domestic worker rights and protections in the country.

Before the bill, domestic workers were not entitled to benefits such as compensation for work-related injuries or illnesses.

Through the new Act, the Compensation Fund will start accepting claims from domestic workers and their dependents for injuries or deaths resulting from work-related accidents.

The Act also identifies the “main employer” of a domestic worker and holds them accountable for any workplace injuries sustained by the employee. Additionally, employers and the domestic worker will be required to contribute to the Unemployment Insurance Fund.

Any employee who works more than 27 hours per month must be registered with the Unemployment Insurance Fund (UIF), including domestic workers.

Employers who have domestic workers working these hours must register as a contributor with UIF and register their domestic workers as their employees.

A total of 2% of the employee’s salary must be paid to UIF each month – 1% has to be paid by the employer, and the other 1% may be deducted from the employee’s wages.

In addition to this, to cover workers against occupational diseases, injuries and death, employers must register with the Compensation Fund and submit annual returns.

What you must pay

Employers make contributions to the Compensation Fund. Their employees can claim from the Compensation Fund if they become ill, are injured, disabled or killed while performing their work duties.

Employers pay an annual contribution to the fund based on an employee’s total earnings for the year.

Employers are required to submit a statement of earnings paid to all their workers – typically from the beginning of March to the end of February. The latest gazette changes this to 30 June 2023 for the 2022 assessment.

For the 2023 assessment, the relevant period is 28 February 2023 to 31 March 2024.

The annual assessment fee is calculated on workers’ earnings, and an assessment tariff is based on the risks associated with the type of work being done.

Earnings include all the remuneration workers receive from the employer, including:

  • Overtime;
  • Bonuses paid;
  • Commission;
  • The cash value of food and quarters supplied as part of their remuneration package;
  • The cash value of fringe benefits;
  • Travel and other allowances; and
  • Any other remuneration in cash or kind to an employee as part of their contract.

Earnings exclude

  • Reimbursive payments;
  • Non-recurring payments for specific tasks outside normal duties;
  • Intangible fringe benefits;
  • Payments to cover special expenses; and
  • Other non-recurring or occasional payments.

Earnings carry both a minimum and maximum threshold per employee, annually. The Maximum earnings threshold is R529,246 (if an employee earns more than this in a year, it is capped at this amount), while the minimum is R1,443 – or R498 for domestic workers.

Any submissions after the deadline will be charged a 10% penalty for late submission, the department said.

“Employers thus have until 30 June 2023 to submit all their Return of Earnings to avoid a penalty for the late submission of the 2022 ROEs. To be in good standing, you are required to submit the Return of Earnings before the set deadline.”

It is against the law for failure to submit the ROEs, and penalties will be charged, it said.

Payment must also be made within 30 days to avoid interest. A Letter of Good Standing will be issued on receipt of the full payment and can be verified online using the unique Certificate Number.

Who is the employer?

Under the new Act, an employer is anyone, including the state, who employs at least one employee.

If an employee’s services are “let, lent or temporarily made available” to someone else – that person is considered the employee for that period.

When it comes to labour brokers – or services where a person is provided to a client for the rendering of a service or performance of work – these brokers or services are considered the employers, not the clients hiring the services.

Given these definitions, and in the context of domestic workers, whoever pays the domestic worker in question is regarded as the employer for purposes of the fund – for whichever duration – and will be required to comply with the Act.

Employees include full-time workers, casual/temporary workers, and all domestic workers.

The Return of Earnings submissions can be made online at the department’s website. An example of the forms required can be seen in the gazette below.

Read: Huge blow for domestic workers in South Africa

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