The UIF conundrum
We're all reeling from the saga of having to comply with the new drivers licence cards. The new plastic bags law that comes into effect this week has us hording our 'checkers' for future use. And maybe now you're thinking you're a law-abiding citizen, and then UIF hits you. We asked Human Resources consultant, Alexandra Hadfield, to explain exactly what the new UIF law means to all employers.
And all the contradictory stories in the media in the past two weeks have definitely only confused this Editor further. If you've purposefully been out of cell and media range in the bush over the past Govt sponsored holidays - you were supposed to register your domestic worker for UIF last week. UIF is a serious law and affects small businesses the most - this is not just about registering your domestic, but all staff you employ for more than 24 hours a month, even as a casual, you have to pay UIF for them or face big fines. We know its an admin nightmare as these things always are, and if you're anything like me when it comes to red tape, avoidance kicks in!
The Unemployment Insurance Fund (UIF) is a Government controlled fund to make sure that people who lose their jobs under certain circumstances, have some money for a few months until they find another job.
QUESTION: What does UIF stand for?
ANSWER: Unemployment Insurance Fund
QUESTION: What is the role of the UIF?
ANSWER: The UIF is a fund, which provides short-term relief to workers when they become unemployed or unable to work due to illness, maternity leave, adoption leave or death (compassionate leave).
QUESTION: What is the new law on UIF?
ANSWER: All workers that work for at least 24 hours a month will have to contribute to the fund. The contribution that should be deducted from the employee's salary is equal to 1% of the total of all earnings, commission excluded. In addition to the 1% that is paid by workers, the employer also contributes 1% for the worker. The total contribution that is paid is therefore 2% for every worker employed. For example, if your employee earns R500 a month, he or she will have to pay R5 to the government every month and you will have to pay R5 to the government every month, as the employer. The employer needs to deduct the employee's contribution off their wages.
QUESTION: What does it mean?
ANSWER: All employees now have to contribute to the UIF. All workers, not just domestic workers, have to be registered with the fund. In line with the UIF's vision; it means that the UIF will play a significant role in reducing poverty by providing effective short-term unemployment insurance to all workers who qualify for it and assisting them in their re-employment.
QUESTION: What does it mean to me, as an employee?
ANSWER: The fund could benefit you if:
You can qualify for the benefits only if you have worked for at least four years, this amounts to 238 day's credit. If you've worked for less than four years you can claim for the number of day's credit accumulated. When a claim is submitted, the UIF office will check how many days' credit has been accumulated. Unemployment benefits are calculated from the date of unemployment. Benefits can only be paid if services have been terminated by the employer - you can't claim if you resign.
QUESTION: What does it mean to my business, as an employer?
ANSWER: As an employer you have to register with the fund as soon as you employ any workers. It is the responsibility of the business to register and make the necessary contribution deductions from all employees. It means that you will have to keep records of all employees including casual workers that work sometimes for you. You would have to update your records with the UIF department regularly where employee turnover or recruitment is concerned.
QUESTION: What do I have to do to comply with this law?
ANSWER: You have to ensure that you register your business and employees with the UIF. You can phone Tel: (012) 337 1636 for registration or go to the www.labour.gov.za site for online registration on the website. There are offices in every major centre, Tel: (012) 337-1636 for the office nearest to you. Johannesburg: 27 Bond Street, Arma Park, Randburg, Gauteng.
QUESTION: How do I pay UIF?
ANSWER: The UIF have made it easy to pay contributions. You are able to pay your contributions monthly or annually, by cheque or via their website www.uif.gov.za. To post your contributions, phone Tel: (012) 337-1636 for the address of the nearest UIF office to you.
QUESTION: What happens if I do not obey the law?
ANSWER: You could face a fine of R5000 or up to five years in jail.
About Alexandra Hadfield
Alexandra Hadfield is a Human Resources Consultant, specialising as an external Skills Development Facilitator for companies to assist with the establishment of learnership programmes within the Services SETA (Sector Education Training Authority). Hadfield also consults on the following HR needs, such as disciplinary procedures, UIF registration, etc. A Hadfield & Associates can be contacted on email: , Cell: 0829279241.
