DEPARTMENT OF LABOUR COMPENSAYION FUND

LEGISLATION USED

• Workmen’s Compensation Act, 1941. Act No 30 of 1941• Compensation for Occupational Injuries and Diseases Act, 1993

Act no. 130 of 1993 as amended Act 61 of 1997

MISSION OF THE COMPENSATION FUND

• To compensate employees for disablement caused by occupational injuries sustained and or diseases contracted in the course of employment or their dependents for death resulting from such injuries and or diseases and to pay reasonable medical expenses incured

REVENUE OF THE COMPENSATION FUND

• Consists mainly of annual assessments paid by registered employers on the basis of a percentage of the annual earnings of their employees. This rate is fixed per industry subclass.

• The Act, however, makes provision for a minimum assessment to ensure that the assessment is not less than the administrative costs.

• NB: All employers conducting any business in the Republic of South Africa must register with the Compensation Fund

DEFINITION OF AN EMPLOYER

• Any person, including the State, who employs an employee

• Duties of an employer are as follows:

Register as an employer with the Compensation Fund (Sec 80)

Keep records of employee’s earnings (Sec 81)

Furnish annual Return of Earnings (Sec 82)

Pay annual Assessment (Sec 86)

Report all accidents and or occupational diseases (Sec 39)

DEFINITION OF AN EMPLOYEE• A person who has entered into or works under a

contract of service or apprenticeship or learnership with an employer, whether the contract express or implied, oral or in writing and whether the remuneration is calculated by time or by work done or is in cash or in kind, and includes;

A casual employee employed for the purpose of the employer’s business

A director or a member of a body corporate who has entered into a contract of service with the body corporate in so far as he acts within the scope of his employment in terms of such contract

A person provided by a labour broker against payment to a client,

Excludes domestic workers

CONTRACTORS AND SUB CONTRACTORS

• Contractor or sub contractors to register with the Fund and pay assessment

• Failure to comply with the COID Act by the sub contractor will make the mandator or contractor to be responsible for any claims from the sub contractor’s employees

• The contractor may recover such payments direct from the sub contactor

NON COMPLIANCE BY EMPLOYERS

• Will results in A temporary dummy registration in his names under

3394 subclass

Estimated annual return of earnings

Penalties and Interests being imposed

MUTUAL ASSOCIATIONS

• Rand Mutual Assurance Company Ltd (Rand Mutual)

for Mining Industry • Federated Employers Mutual Assurance (FEM) for

Building Industry• They operates under a license from the Minister of

Labour• Permission is given for employers to be transferred to

them

EMPLOYER REGISTRATION NUMBER

• Starts with a 99 ( double nine)

• Subclass can be changed when the nature of business changes

• Nature of operations determine the industry and rate for assessment

SECTION 85 (LOADING AND REDUCTION)

• Provides for Increased and reduced rate, depending on the claim costs of an employer in a 3 year period

ASSESSMENT YEAR

• Named according to the year it starts in, e.g. 2011 = 1 March 2011 to 28 February 2012

• Annual return of earnings, which reflect actual earnings paid to all employees up to the maximum for the preceding year, as well as provisional earnings, up to a maximum for the current year.

• Formula for calculating assessment is annual earnings x rate divided by 100 = assessment for that year.

• Payable assessment amount = Final assessment of preceding year, Less provisional assessment raised for the previous year Plus provisional assessment raised for the current year.

LETTER OF GOOD STANDING

• Issued to employers who are in good standing with the Fund in terms of COID Act

• Can be issued once in a year or monthly, depending on special arrangements made with the Fund and it is now automated

• Requirements for issuing the letter are as follows: Employer must be registered with the Fund Return of earnings must be up to date Payments must be up to date, and penalties are charge on late payments and interests are also charged on revolving balance

PAYMENT OF ASSESSMENTS

• Direct deposit to ABSA Bank Branch code: 509 045 Account number: 1007930905 Use employer’s unique deposit reference number found on the notice of assessment as your reference

FAILURE TO PAY

• 10% Penalty will be imposed in terms of section 87(1)

• The penalty will be calculated on assessment amount excluding any other penalty already imposed

• Interests will also be charged in terms of section 86(2) and is calculated on the assessment amount, excluding penalties.

• Interests rate would be used as per PFMA

THANK YOU

JAN MADIEGA