Extension for Compensation Fund returns gives SMEs some breathing space

30 Mar 2015

The Department of Labour has extended the deadline for Return of Earnings for employers registered with the Compensation Fund to 31 May 2015. These returns are usually due by the end of March each year.

Madelein van der Watt

Businesses - especially SMEs - who have been struggling to file returns via the online ROE submission portal have been granted some welcome breathing space. Employers who did not receive their assessments in a timely manner will also welcome this news.

What information is important for the completing of the Return of Earnings?

The employer's contact details;

The number of people employed for the year of assessment (1 March, 2014, to 28 February, 2015);

The total earnings of each employee (up to the annual limit of R332,479);

Estimated headcount for the 2015 year of assessment (1 March, 2015, to 29 February, 2016); and

Estimated earnings for each employee for the 2015 year (up to the annual limit of R355,752).

The Compensation Fund has not always been as fast and efficient as employers would like it to be, leaving many SMEs without the letter of good standing they need for a range of purposes. Without it, they cannot tender for government business.

Letter of good standing

In construction, safety officers will not allow a new project to commence unless the company can produce a valid letter of good standing. The aim is to ensure that employees who are injured on site will be able to claim from the Compensation Fund and that the employer will not have to carry the additional costs of medical bills or wage payments during periods of incapacity.

The Compensation Fund will only issue this letter of good standing will if the following criteria have been met:

The employer must be registered with the Compensation Fund;

The Return of Earnings submissions must be up to date;

All assessments must have been completed to date; and

The employer must have settled all outstanding assessed debts.

In 2013, the fund offered discounts on assessed returns if payment was made before a specific date. This was a great idea that was poorly executed. Companies were given very little information about how to apply for the discounts. The department required employers to make payment in full with the promise that the discounts will be passed at a later stage. This has yet to happen.

Despite the extension of the deadline, SMEs would be wise to remember the Compensation Fund's track record in administration and communication and submit the returns as soon as they can.

View the official notice published by the Department of Labour.

Madelein Taljaard (van der Watt)

About Madelein van der Watt

Madelein van der Watt is Development Manager at Sage Pastel Payroll & HR and a regular commentator in financial and business media, is an expert in areas of employee tax and legislative changes affecting payroll.