What must I know about employing someone in SA?
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When it comes to employment in South Africa, there is a few things that must be taken into account
This must be seen as a summary of the most important and relevant requirements, but not a fully exhaustive list.
When must a person be employed / when is a person considered to be employed by Shofar?
Every person receiving ANY form of compensation (Salary/Donation/Covering of living expenses etc) for ANY form of work performed for Shofar… and the work performed is equal or more than 24 hours per month.
We are required to register such a person with the Department of Labour, and OID and UIF must be paid in respect of this person – failure to do so could result in significant penalties and outstanding balances.
e.g. we have an intern at the office that helps out one day a week, but we don’t pay him a salary, but help to cover his tuition costs or part of his living expenses. This intern is deemed an employee of Shofar and we are required by law to pay OID and UIF.
Apart from the labour law requirements, SARS requires Shofar to register an employee for PAYE if that employee works 22 hours or more in a week, according to the SARS “Standard Employment” definition in the Fourth Schedule to the act.
Basic Guide to Annual Leave
Sectoral Determination 9 requires that full time employees get a minimum of 21 consecutive days of annual leave each year. Shofar can only pay out annual leave to employees instead of granting annual leave when employment is terminated. This results in an accumulation of 1.67 days of annual leave for each full month worked. For part-time employees, annual leave will be apportioned to time worked, but annual leave will only be taken for times the employee would have worked for Shofar, resulting in an effective 21 days for the year.
SARS Standard Employment definition:
Any employment where an employee (including scholars and students), is required to render services to a single employer for a period of at least 22 hours in every full week provided that no regard shall be had to:
- Periods of temporary absence of the employee due to leave or exceptional circumstances; or
- Any temporary reduction in working hours imposed by the employer, for instance due to a reduction in the demand of the company’s product, the employer imposes a temporary working week of less than 22 hours
Applicable labour laws:
Basic Guide to UIF Contributions:
http://www.labour.gov.za/DOL/legislation/acts/basic-guides/basic-guide-to-uif-contributions/
http://www.labour.gov.za/DOL/legislation/acts/basic-guides/basic-guides-uif-index/
Basic Guide to Compensation for Occupational Injuries and Diseases [OID] :
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– Employers must pay unemployment insurance contributions of 2% of the value of each worker’s pay per month.
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– The employer and the worker each contribute 1%.
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– Contributions are paid to the Unemployment Insurance Fund (UIF) or the South African Revenue Services (SARS).
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– The Unemployment Insurance Act and Unemployment Insurance Contributions Act apply to all employers and workers, but not to workers working less than 24 hours a month for an employer
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– Employers must pay the 1% they deducted from workers, together with the 1% they have contributed, to the UIF or SARS before the 7th of every month.
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– The annual assessment fee is of an employer is based on their employee’s earnings and the risks associated with the type of work or profession. Before 31 March each year, all employers (including contractors) must submit a statement of earnings paid to all their workers from the beginning of March to the end of February. Based on Legislation in section 82 (chapter IX), of the COID Act
