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LocdkownZA News

National Lockdown – What Now? – 8th Update

  • 8 April 202016 April 2020
  • by Eben van Deventer
eben
eben@hrcity.co.za

Good Evening. It is now day 13 of the Lockdown and the Department of Employment and Labour have finally published the updates to the Directive relating to the COVID-19 Temporary Employee / Employer Relief Scheme.

We have already compiled a useful combined version which incorporates the latest amendments along with a handy reference to the relevant sections of the Unemployment Insurance Act.

Click Here to Download

The Original Directive is valid for a period of three (3) months from the date on which the National Lockdown commenced (Midnight, 26 March 2020) and provides for the following:

  • The establishment of the TERS fund which is intended to assist with the payment of Employee benefits during any lay-off or short-time caused by the COVID-19 pandemic and the resultant National Lockdown.
  • Company’s may claim the TERS benefit from the UIF on the following conditions:
    • The Company must be registered for UIF;
    • The Company must comply with the application procedures for the TERS benefit; and
    • The lay-off or short-time must be caused directly by the COVID-19 pandemic and subsequent National Lockdown.
  • The normal rules relating to the payment of UIF benefits do not apply to the TERS benefit.
  • The TERS UIF benefit will only apply to the payment of the Employees’ ordinary salaries.
  • The minimum amount an Employee should earn during the lockdown should not be less than R 3 500.00, but earnings in excess of R 17 712.00 per month is not taken into consideration.
    • The Calculation of the amounts is based on the UIF formulae and will range between 60% for the lowest income earners to 38% for the highest income earners.
    • This means an Employee who ordinarily earns R 25 000.00 per month will only qualify for a maximum of R 6 730.56, being 38% of the R 17 712.00 limit.
  • The TERS benefit will apply for a maximum period of three (3) months.

Additionally, following the amendments published Today, the following additional considerations have now been addressed:

  • The TERS fund will now also apply to businesses who do not need to close entirely, where only a limited set of Essential Services workers are working while the balance are laid-off or on short-time during the Lockdown.
  • Where Bargaining Councils now claim on behalf of their members, the Employer will not be allowed to also file a claim.
  • Employers who are paying a portion of Employees benefits during the National Lockdown will no longer be refused claims under TERS and Employees, under such circumstances will now be entitled to claim the maximum benefit or the difference between their normal salary and the portion paid during the Lockdown by the Company or the Maximum TERS claim, whichever is the smaller of the two.
    • This means an Employee who would ordinarily earn R 23 000.00 per month and who is now paid only R 20 000.00 by his/her employer, will qualify for R 3 000.00 from the UIF TERS fund.

Furthermore, given the difficulties which we have seen with completing and applying for the COVID-19 TERS Benefit, we are including a summary of the information we have been able to obtain to assist in this process:

In completing the required documents, the following should apply as per our current understanding:

  • Lockdown Period
    • Refers to the temporary lay-off period during which the Employee will not receive any income or reduced income.
  • Monthly Remuneration
    • While the correct format should refer only to the Employees’ basic salary (Excluding Allowances and Overtime), it is trite that certain Allowances form part of an Employee’s ordinary remuneration and the Employee’s ordinary UIF deduction is made against this total applicable package.
    • The Directive makes no specific reference to the meaning of salary in this regard and therefore this uncertainty still exists.
  • Leave Income
    • Is the value of income which the Employee will receive during the Lockdown and includes Annual Leave and any portion of payment paid by the Company.
  • Employment End Date
    • This column should only be completed if the Employee’s employment is terminated for any reason during the Lockdown, otherwise this field should remain blank.
  • Minimum Wage
    • Some confusion exists in this field as specific Bargaining Councils and Sectoral Determinations set minimum wages for those undustries, however for the purposes of the TERS benefit, only the publishded National Minimum Wages should be used.
    • Note that the format is again unclear and the sample data suggest a minimum wage per month, rather than the published daily rates provided for in the DEL’s autoreply.
    • For this reason, we urge you to apply the calculation of ordinary days worked on average during the month for this portion.
    • Domestic Worker: R 124.56 per day = R 1 078.68 for an Employee who works twice a week (Daily Rate * 2 * 4.333).
    • Agricultural Worker: R 149.44 per day = R 3 238.31 for an Employee who works six days per week (Daily Rate * 6 * 4.333).
    • Extended Public Works Programs: R 91.36 per day.
    • Others: R 166.08 per day = R 3 598.12 for an Employee who works five days per week (Daily Rate * 5 * 4.333).
  • Bank Account Confirmation
    • Only Bargaining Councils are required to open special bank accounts and ordinary employers need not do this but can rather provide proof of the bank account as available from your bank.

Take further note of the fact that the Employer can, during their application, elect to either have the UIF pay the TERS funds directly to Employees or, if it would prefer, into the Employer’s bank account, whereby the Employer can pay the funds to its’ Employees. (PaymentMediumID Field).

The official turnaround times for these applications have been stated note that the UIF will take ten (10) business days to verify the documents submitted by the Employer, whereafter the funds will be released, either directly to the Employee or to the Employer.

The Employer Must pay these funds to the Employees within two (2) days of receipt of the funds and Must provide proof of such payment within five (5) day of receipt of the payment.

The above information has been gleamed from a variety of sources and includes some interpretation as to the available public resources. We take no responsibility for the accuracy or correctness of the information contained herein and reiterate that it is provided on a best-effort basis.

We remain available to all of our clients and can be directly contacted at any time for assistance and guidance.

Eben van Deventer          082 412 2845     eben@hrcity.co.za

AJ van Niekerk                  079 890 4411     aj@hrcity.co.za

Elri de Bruin                       082 753 5695     elri@hrcity.co.za

Conrad Luus                      072 624 3410     conrad@hrcity.co.za

We will continue to post updates on developments as they become known to us during this time.

To stay up to date, please subscribe to our COVID-19 Updates.

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1 COMMENT
  • Tlou Solomon Moloto
    9 April 2020 at 18:46
    Reply

    This I believe is going to feed us with some hidden information that is going to be hard for us to discover.from now I really rely on you guys.and thank you for showing up as source of help for the helpless.

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