WITH more and more South African businesses in distress amid an economy decimated by Covid-19 disruption, some employers are not paying their required staff Unemployment Fund (UIF), with some employees afraid to report their employers’ non-compliance to laws, according to the Department of Employment and Labour.
The amount of the contribution due by an employee must be 1 percent of the remuneration paid by the employer to the employee.
The employer must pay a total contribution of 2 percent, with 1 percent contributed by the employee and 1 percent contributed by the employer, within the prescribed period.
UIF spokesperson Makhosonke Buthelezi said in an interview with Business Report this week that the organisation only becomes aware that the money deducted by employers from the employees’ salaries was not paid to the fund when an employee comes in to make a claim.
Employees feared being reprimanded or even being victimised at work for reporting the non-compliance. The fund said that it is only once an employee submits claims documents to the fund that they can check on the system whether the employer has been making contributions.
“It is only then that we can see from the salary slip that there were deductions made, but not paid to the UIF,” Buthelezi said.
For this reason, the fund said it was difficult to say how much money employers were deducting from employees’ pay, but not turning it over to the UIF.
By the end of last month, the UIF said it had paid R931 million in ordinary benefits since the beginning of December 2021 to about 180 833 beneficiaries.
It was able to achieve this following the fund’s decision to decentralise processing of u-Filing claims from the UIF’s head office in Pretoria to the provinces, which resulted in applications being processed faster, thereby ensuring that workers put food on the table and meeting their financial obligations quickly.
The decentralisation process had drastically reduced the online claims backlog from 111 000 in September to 28 000 in November last year. Some 3 701 claims submitted via the u-Filing system could not be paid due to various reasons, it said.
Buthelezi said non-compliance with the UIF law impacted UIF negatively because if an employee put in a claim, the UIF was obliged to pay it, as contributions were deducted from the employee’s salary.
“It is not the employee’s fault that the employer did not make contributions to UIF as required by law. So, we end up paying the employee without having received contributions, and that affects our revenue,” he said.
The fund said that it could not tell how many employees had found themselves in this situation, because it did not categorise claims as they received them. The UIF ultimately paid the claim, provided that the employer co-operated with them.
To clamp down on this non-compliance by employers, the UIF said it carried out random inspections of businesses, and where non-compliance with labour laws, including the Unemployment Insurance Act was found, a notice was issued to the employer.
Failure to comply within the given period resulted in the imposition of a fine.
The Department of Employment and Labour said that another matter of equal concern was the challenge of Compensation for Occupational Injuries payments, which it also only became aware of when there was an injury on duty, while at times employers concealed such fatalities.
Another issue was the non-compliance with the National Minimum Wage. The department said that most of these challenges employees faced were caused by being unorganised.
“As the department we encourage employees to get organised and form unions, as this will make it easy for them to give us tip-offs without fear.
“In this way workers will be able to make demands from employers about compliance with all labour laws, and they will assist to be the eyes and ears of the department where non-compliance is experienced.”
BUSINESS REPORT ONLINE