Last Night the President announced that South Africa will nationally lockdown for 21 days due to the rapid rising COVID-19 pandemic, starting from midnight on Thursday, 26 March 2020 until midnight on Thursday, 16 April 2020.
This extreme, but necessary measure, will have a considerable impact on people’s livelihoods, economically, financially and socio-economically.
Firms that are able to continue their operations remotely should do so.
The President also announced a special dispensation for companies that are in distress because of COVID-19.
RELIEF TO EMPLOYERS
A range of measures were announced in order to provide relief to employers and assist them to retain and pay their employees if possible.
Whats we know….
Wage Payment Relief:
Government “is investigating” using the Temporary Employee Relief Scheme (TERS), to enable companies to pay employees directly during this period and avoid retrenchment and /or layoff.
Details on this proposal are not yet available however the latest TERS Document is attached below and we suggest that you consider requesting application forms and prepare them for submission.
Temporary Tax Relief
Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn (PAYE) liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months.
Using the tax system, relief “will be provided” by a tax subsidy of up to R500 per employee per month for the next four months for those private-sector employees earning below R6,500, under the Employment Tax Incentive.
It would appear that this relief will be paid back to compliant employers and will probably need to be claimed from SARS under PAYE.
Details are still to follow.
UIF & Skills Levy Constributions
Government “is exploring” a temporary reduction of Employer and Employee UIF and SDL contributions. Nothing clear on this yet.
The President stated that if need be, the reserves within the UIF system may be utilised to support those workers in Small, Medium Enterprises (SMEs) and other vulnerable firms who are faced with a loss of income and whose companies are unable to provide support.
Details will only be made available in the next few days.
Payment of employees:
The above measures have been announced with a view to retaining employees and minimising retrenchments and lay offs.
Employers who are not able to continue to pay their employees during this period of lockdown consider the following options:
- Apply for reflief from TERS per the above;
- Apply for PAYE relief;
- Await details of UIF & SDL contribution reduction
- Substitute annual leave for lockdown;
- Consider temporary Lay-offs with UIF claim; (UIF Form below).
- Afford short term loans to employees in lieu of wage payment.
Workers who work for reduced hours or a short time will be able to claim from UIF for lost hours:
- It is a flat rate benefit of R3500 per month for the period of the shutdown up to a maximum period of 3 months.
- If the shutdown lasts longer than 3 months, the 4 th month and thereafter, is calculated in terms of the normal UIF calculation,
- It will not affect any future claim for UIF
Claim Form (Employer to complete UI 19 & UI 2.7)
The employee and their bank to complete a UI 2.8 Form to have money paid into their bank accounts
Please see the attached EASY – Aid Guide fro Employers (Reduced work time benefits/Illness Benefits/Dependants benefits)
Any employee who falls ill with COVID-19 through exposure at their workplace will be eligible to claim from the Compensation Fund or FEM. Employers should assist employees with such claims through their respective COIDA Insurers.
It is clear that the President, government, social partners and business have remained lucid in coming together, making a proper and well-thought-through national lockdown possible, in stamping out the scourge of COVID-19.
We believe that the Building Industry will be particularly hard hit by these measures but we must do whatever we can to ensure our survival and the ongoing employment opportunities in our industry after COVID-19.
As the President said, “let’s be courageous, patient, and above all, show compassion in this period.”
The MBA will keep our members abreast on any new developments herein.
For any enquiries, please contact our office at (041) 365 1835 and/or e-mail us at email@example.com. or for specific queries please contact our staff per below: