Lockdown Guide for Employers

UIF BENEFITS

The Minister of Employment and Labour has announced measures that the Department will put in place as required under the current special circumstance relating to the Corona virus (COVID-19) and its impact on UIF contributors. The Unemployment Insurance Fund will compensate affected workers through a new “National Disaster Benefit” and the existing Illness, Reduced Work Time and Unemployment benefits. This new “National Disaster Benefit” and any other normal UIF benefit is only applicable to employers who are registered with UIF and make monthly contributions as required by the Contributions Act of 2002.

  • The employer may decide, as a direct result from the current Corona virus (COVID-19) pandemic to close their business for a period and send employees home. This constitutes a temporary lay-off. If the employer cannot pay his employees for this period, they can apply for the “National Disaster Benefit” from the UIF.
  • There are two types of UIF claims available to employers and employees during the lockdown: the COVID-19 Temporary Employee/Employer Relief Scheme (TERS) and the Reduced work time/ Short Term Closure Benefits.

These benefits are described below.

TEMPORARY EMPLOYEE/EMPLOYER RELIEF SCHEME (TERS)

  • It is a scheme where employers claim on behalf of their employees who have lost income due to COVID-19, no forms are completed by employees.
  • This scheme does not use employees’ UIF credits.
  • Is likely to be paid out quicker than the normal UIF claims.
  • Can be claimed for up to 3 months.
  • It will provide assistance with salaries only to a maximum of R17712 per employee per month.
  • The benefit will be calculated in terms of the income replacement rate sliding scale of 38 % (for high earners) up to 60 % (for low earners) as provided in the Unemployment Insurance Act, subject to the maximum threshold which is currently R17712.
  • Employers are encouraged to make use of this scheme in order to reduce the number of individual UIF applications. Please note however that it cannot be done at the same time as the individual UIF applications. It makes sense for every employer to first consider claiming TERS before letting employees claim using their own benefits.

REQUIREMENTS FOR THE EMPLOYER TO APPLY:

  • Company must be registered with UIF
  • Closure must be directly linked to COVID-19
  • Employees must not be being paid by the employer during the closure

HOW TO APPLY:

  • The employer must send an email reporting the closure to covid19ters@labour.gov.za, an automatic response will be received explaining the process.
  • The dedicated phone line for TERS queries is: 012 337 1997 and they operate from 8am to 8pm, Monday to Friday.

REDUCED WORK TIME/ SHORT TERM CLOSURE BENEFITS

  • Employees claim for themselves when their employer shuts down for a certain period or implements reduced working hours / short time / layoffs.
  • Application is done by the employee (with the employer’s assistance in completing some of the forms)
  • Uses the employees’ UIF credits.
  • Will probably be paid according to normal UIF turnaround times.
  • Can be claimed for up to 12 months.

REQUIREMENT FOR THE EMPLOYEE TO APPLY:

  • Please click here for an easy-aid guide provided by The Department of Labour which explains the forms to be completed and how to apply.

Please contact Info@pyperturner.co.za if you require the forms referred to in the above-mentioned link.

HOW TO APPLY:

  • The claim can be done online using uFiling (https://www.ufiling.co.za) – this is the recommended method – use the unemployment benefits tab on the website.
  • Or the forms can be submitted to the nearest UIF processing centre via email for manual processing (email addresses provided in the easy-aid guide link provided above).

LEAVE DURING LOCKDOWN

  • During the lockdown period, an employee may be requested by the employer to take annual leave from his/her annual leave credits. The BCEA allows employers to determine the time that employees can take their annual leave.
  • Please note that this must be done in consultation with employees.
  • Please note that 10 and 13 April 2020 are public holidays and should therefore not be deducted from the employee’s annual leave. Businesses who are closed from 27 March to16 April 2020, and who’s employees work on a normal 5-day Monday-Friday schedule, will therefore require their employees to apply for 13 days annual leave.
  • This decision must be communicated clearly to all employees.
  • In the event that an employer is unable to pay their employees during the lockdown period, they must utilise the financial assistance explained under UIF benefits

The law firm Cliffe Dekker Hofmeyr published a very useful document to assist employers in this challenging time. This document can be accessed here.

GOVERNMENT ASSISTANCE TO SMALL BUSINESSES

  • The Department of Small Business Development has made over R500-million available immediately – accessed via a simplified application process – to assist small and medium enterprises that are in distress.

The SMME South Africa platform (www.smmesa.gov.za) was created to serve as a gateway for SMMEs to apply for both financial and non-financial support, access information about business opportunities and market access support during the pandemic, and beyond.

APPLICATION FOR ESSENTIAL SERVICES DURING THE LOCKDOWN

  • Minister of Trade and Industry Ebrahim Patel on Wednesday announced that businesses can apply for required certification via the Companies and Intellectual Property Commission’s Bizportal website (bizportal.gov.za/) from 26 March 2020.
  • It is an automatic electronic process and certification will be made available instantly. A physical certificate will also be issued on the same website.
  • Please note that registration on the http://www.bizportal.gov.za portal is not obligatory, nor legally binding. It is just meant to assist where you are stopped at roadblocks, etc.
  • The portal is currently experiencing technical difficulties, eployers are therefore advised to rather concentrate on the permit letters for the movement of essential workers, as well as for your essential distribution and logistics services.
  • In order to assist companies who need to register, Fin24 published the steps that must be followed, according to the DTI. The steps are provided below and can also be accessed on the Fin24 website: https://www.fin24.com/Economy/lockdown-step-by-step-guide-to-registering-your-business-as-an-essential-service-20200326
  1. Go to the Bizportal website at https://bizportal.gov.za/.
  2. After clicking on the Services tab, on the top right of the page, you will be taken to a new page with icons. The icon you want to click on next is the Covid-19 essential services icon – which is bright red.
  3. Once you click on this Covid-19 essential services icon, you will be taken to another page where you will be able to make an application to the CIPC. The page includes a list of essential services. Scroll down to the bottom where you will find the application icon.
  4. According to the DTI, the application will be a “simple declaration”, requiring minimal registration details, including this such as the type of business/trade, trading name, whether it meets the requirements contained in the essential services list. The list of essential services is available on the website too.
  5. The person applying must fill out their contact details, as well as the number of employees that will be working during the lockdown period. The CIPC registry will then pre-populate the remaining company information.
  6. A certificate stating that the business is allowed to remain trading will be emailed or can be downloaded from the site.
  7. The certificate can then be used as evidence to authorities – to show the business has been given government permission to trade, according to the DTI. The business’s employees will have unrestricted movement, only in the course of the trade.

“It should be stressed and noted that if you make a false application to the CIPC, and are indeed not an essential service as per the government regulations, such will be taken as a fraudulent application and will render yourself as applicant liable to criminal prosecution and sanction,” the DTI warned.

CONTACT US

If you require any assistance please do not hesitate to contact us:

General enquiries – Info@pyperturner.co.za