Calls for big change to domestic worker compensation in South Africa

Following their inclusion as formal employees, giving access to a Compensation Fund and UIF, stakeholders are now calling for domestic workers to qualify for pensions in South Africa. 

In 2023, the government included domestic workers as formal employees due to the prevalence of the domestic sector in South Africa.

This means anyone who employs or wants to employ a domestic worker in South Africa must follow the Basic Conditions of Employment Act (BCEA) and the Sectoral Determination for Domestic Workers (SDDW).

These amended regulations also mean domestic workers are eligible for the Unemployment Insurance Fund (UIF) and the Compensation for Occupational Injuries and Diseases Act (COIDA), and should be registered for such. 

The UIF applies to any worker earning over R1,000 a month, so a minimum-wage domestic worker qualifies.

With UIF, employers must deduct 1% of each employee’s remuneration and match this amount, totalling 2% of the employee’s remuneration.

Despite this progress, domestic workers are not benefiting, mainly due to the lack of awareness and administrative burden for employers. 

Domestic worker platform SweepSouth noted that in 2024, only 7% of workers in its annual survey were registered for UIF. In addition, most (59%) of workers had never heard of COIDA or its implications.

According to Stats SA, about 850,000 people, most of them women, are employed as domestic workers in South Africa, contributing 5.2% to total employment.

“Employers still don’t see themselves in a formal position when hiring a domestic worker. That mindset needs to change,” said Progressive Domestic Workers Union of SA (Prodwusa)’s secretary general, Thato Maleka. 

“These are recognised workers with rights, and employers must understand their obligations—starting with contracts, UIF registration, and more.”

Prodwusa pointed out that pensions are a significant concern among domestic workers’ challenges. 

“Domestic workers work in informal or sometimes isolated settings where there’s little job security or access to benefits such as pensions,” said Thato Maleka. 

“Despite working many years and dedicating their lives to this work, most domestic workers retire with nothing or very little to show for it.”

As a result, Prodwusa has decided to call on the government to take meaningful action to secure the futures of domestic workers by creating pension funds for them. 

How it will work

Maleka explained that the union has initiated the first steps towards establishing a pension fund specifically for domestic workers.

“We’ve realised that Section 4 of the Pension Funds Act allows us to register a pension fund with the Financial Sector Conduct Authority (FSCA). We’ve decided to approach FSCA and establish a voluntary pension fund,” he said. 

This initiative, described as phase one, aims to serve as a proof of concept while laying the groundwork for broader policy reform.

“In this phase, we are registering the fund ourselves and will work with voluntary employers and workers already in our database,” Maleka added. 

“We want something tangible—black and white evidence—to demonstrate how the fund could work.” 

He argued that this would strengthen the union’s case when it moves to the next phase, where it will push for legislative or policy support.

This second phase will involve lobbying Parliament and other key stakeholders to support a nationally recognised pension scheme. 

“That phase will include multistakeholder forums such as the National Treasury and others,” said Maleka. “We want to push for a bill, or perhaps an amendment to the existing Pensions Act.”

He added that the pension fund would not be entirely funded by the government and that employers should contribute, as is standard practice with most businesses in South Africa. 

“We are proposing that from the national minimum wage or whatever the employer chooses to pay above that, the worker and the employer contribute 5% towards a pension. 

Maleka highlighted that even Treasury and the Department of Labour representatives have expressed willingness to support the initiative. “That gives us confidence,” he said. 

He added that while the effort is still in its early stages, the union is committed to seeing it through.