SimplePay Blog

Please note: The information provided in this blog is correct at the time of writing, but as this is an unprecedented and ever-changing situation, we will do our best to ensure we keep ourselves and our clients up to date. Please check back regularly for updates – we will also notify you of these by email and system notifications.

A Note on UIF Forms: Our existing functionality allows you to submit the monthly consolidated UI-19 for all employees each month directly to the UIF from the Simplepay website. We’re currently working on new functionality that will provide UI-19 forms for individuals. This is needed needed for employees to claim.

30 March 2020: Information on the option for employers to complete the UIF application on behalf of their employees. Further UIF code 10 is unpacked, related to employees who fall ill.

27 March 2020: 

• Greater detail on the process required to submit both types of UIF applications has been added, including who is responsible for each part of the process.
• More information on what is required when handling employees with reduced hours, to enable them to claim a benefit.
• Clarification on the different codes required when ending your employee’s service in different situations.
• Brief update on the progress of TERS at the foot of the blog.

26 March 2020: Updated the requirements for form UI 2.8 to be accompanied by a bank statement, stamped by the bank.

On Monday 23 March, President Ramaphosa announced a 21 day lockdown from 23:59 on Thursday 26 March. Many South Africans welcomed this but are also uncertain as to what this means for their employees and businesses. Over the past few days, the respective Governmental Departments have released information regarding plans to support companies and their employees through the COVID-19 pandemic. 

The aim of this blog is to provide guidance to employers on the options available to them around paying employees, putting them on paid and unpaid leave and UIF benefits.

Earlier in the week we let you know that our team has gone fully remote and are pleased to be able to support our clients and employees in this way. In some sectors, this mode of working can be adopted relatively easily and many have already done so; however, for a lot of sectors and employees this is unfortunately not an option. For those employers who have to scale back or suspend regular activities, the following options exist:

Options for Healthy Employees Impacted by Reduced Hours or Temporary Closure 

Where employees are healthy and able to work, but are prevented from doing so due to the lockdown, employers and employees can agree that annual leave be used to cover some or all of the lockdown period on full pay. You are also always able to extend extra paid leave days to all employees should you so wish.

Where none of the paid leave types are an option, employees can be put on unpaid leave. Employees impacted in this way are able to claim Unemployment Insurance Fund (UIF) benefits as a result of either reduced hours or closure. To do this on SimplePay, you will need to provide a code when ending your employee’s service. Please use code 17 for temporary closure or reduced hours, i.e use this code if employees are expected to return to work on 17 April 2020. It is important to note that you must end the employee’s service on SimplePay. If you simply record unpaid leave on the calendar, UIF will not be claimable by employees.

The government intends to extend UIF benefits for these employees for up to three months. Employees who receive no income will be entitled to full UIF benefits.

If you’re paying your employees reduced pay, a partial UIF benefit will be available. For this benefit to be available, there must be an agreement between the employer and their employees to reduce hours as an alternative to retrenchment.

Procedure for Healthy Employees Impacted by Reduced Hours or Temporary Closure to Claim UIF benefits

To claim UIF for a reduction in hours or temporary closure, the following must be completed:

1. Contact and inform the relevant provincial department representative of your temporary closure/reduction in hours. The contact details for each of the offices can be found on page 3 of the Easy Aid Guide for Employers.
2. The following forms and documents need to be completed for each employee:
   1. UI 2.1 (application form)
   2. UI19 (Submitted monthly by the employer) and UI 2.7 (completed by Employer)
   3. UI 2.8 (accompanied by a bank statement, stamped by the bank)
   4. A letter from the Employer confirming company shutdown or employee’s “temporary lay-off” ( or reduced work time ) is due to the Corona Virus 
   5. Copy of Employee’s ID document
3. Once completed, these forms need to be transferred to the employee to submit the claim. Claims can be done at the nearest labour office, online once the employee has registered, or via email or fax, details listed on page 7 of the Easy Aid Guide. If an employer wishes to do this on behalf of their employee, provided they have all the necessary information, this is possible by emailing the relevant processing centre with the required documents. ( n.b. Form UI2.8 could prove difficult for the employer to obtain now that lockdown is in force).
4. To ensure the employee can claim, the must ensure they have:
   • A copy of 13-digit bar-coded identity document
   • A copy of your last six payslips
   • UI-19 supplied by your employer
   • A service certificate from the employer (point 2.4, provided by the employer)
   • Proof of registration as a work seeker
   • A fully completed registration form

This may appear a daunting number of forms, but it is worth noting that the provincial departments, listed in the Easy Aid Guide, will provide the necessary assistance with the application and payment of this benefit type. SimplePay is also in the process of making these forms available through our system, lessening the burden on you and reducing the chance of human error.

Additionally, if your business employs 50 or more employees, who may be subject to temporary lay offs, rapid response teams have been formed to aid you with this process. In respect to this you need to get into contact with your provincial office, as listed in the Easy Aid Guide.

Options for Employees who are suspected or diagnosed with COVID-19

The requirement that an employee suspected of, or is diagnosed with COVID-19, must self isolate for 14 days remains in place. This period can be covered using an employee’s sick leave as with any other instance of illness. If the employee has no sick leave, you can agree to have them use annual leave otherwise they may be placed on unpaid leave. As above, the option to grant additional paid leave is also available. For all of these, record leave on SimplePay as usual.

Where the employee has had to be placed on unpaid leave as a result of contracting COVID-19, the following options to receive some income exist:

1. Apply for an illness benefit through UIF 
   1. This covers the 14 day isolation and requires several documents, including a letter of agreement signed by employer and employee. 
   2. This period can be extended if required. 
   3. Full details on documents required and the application process can be found at the end of this post.
2. Apply for compensation for Occupationally Acquired COVID-19 Disease, through the recently amended Compensation for Occupational Injuries and Diseases Act (COIDA)
   1. This is available if the employee contracted COVID-19 in their place of work or on a business trip to another country or area.
   2. More details can be found in this Government Notice and the process to claim is outlined at the end of this post.

Procedure for Employees who are Suspected or Diagnosed with COVID-19 to Claim UIF benefits

To claim UIF for an illness benefit, the following must be completed:

1. Fill in the following forms:
   1. A confirmation letter from both the employer and employee, stating that they have agreed to 14 days of “special leave”, due to COVID-19.
   2. UI 2.2 (medical portion to be ignored, as this is substituted by the above letter. This is because the employee will already be in quarantine).
   3. UI 19 (which can be completed through SimplePay) and UI 2.7 (completed by Employer)
   4. UI 2.8 (accompanied by a bank statement, stamped by the bank)
   5. Copy of employee’s ID document.
2. On SimplePay, when completing the employee’s End Service, please use UIF code 10 – Illness leave.
3. Once completed, these forms need to be transferred to the employee, who must then submit the claim. An application can be lodged in one of the following ways:
   1. Online at www.ufiling.co.za 
   2. Email or fax the nearest UIF processing centre. (information found on page 7 of this link). If an employer wishes to do this on behalf of their employee, provided they have all the necessary information, this is possible by emailing the relevant processing centre with the required documents. ( n.b. Form UI2.8 could prove difficult for the employer to obtain now that lockdown is in force).
4. To ensure the employee can claim, alongside the other documents they must ensure they have:
   • A copy of 13-digit bar-coded identity document
   • A copy of your last six payslips
   • A service certificate from the employer
   • A fully completed registration form
     

Unlike temporary closure, there is no bespoke assistance for the filing of this application. It is likely though that there are fewer employees that qualify for this benefit, lessening the administrative load. If you do experience any difficulties, we would encourage you to touch base with your nearest UIF processing centre for guidance.

At the end of the 14 day period a UI3 form needs to be completed, for the payment to be executed into the employee’s bank account. This should either be done on the ufiling website, or by emailing or faxing your closest UIF Processing centre, as listed in the aid guide. If the employee remains ill beyond the 14 day period, they must obtain a medical certificate from a medical practitioner and submit a further UI3 in order to be able to continue to claim the benefit.

Options for Healthy Employees Impacted by a Permanent Closure  of Business

Unfortunately, in some cases the strains on your business may be too great, resulting in your company ceasing to operate permanently. If this is true for yourself, you should use code 14, denoting permanent closures, i.e use this code if, upon the completion of the 21-day lockdown, the employee shall not continue their employment. Same as for the temporary closure process above, you must end the employee’s service on SimplePay in order for the employee to be able to claim UIF.

In this scenario, the normal process for claiming UIF will likely need to be followed. Therefore, the 3 months extended period of UIF benefit will probably not be applicable.

Procedure for Claiming under COIDA

There are a few key components to being able to claim under this system. The following are required elements:

• The employee must test positive for the COVID-19 virus (as defined in COIDA).
• The contraction of the virus must arise out of and happen in the course of employment.
• There must be a realistic and logical explanation for the exposure to COVID-19, which occurred in the course of employment.

If the above statements apply to an employee, they could be entitled to claim under COIDA. More detail on the requirements can be found here

WATCH THIS SPACE: Temporary Employer Relief Scheme (TERS) and other Relief Measures for Employers

In an effort to avoid retrenchment, the Government is also in consultation to pay wages of employees in struggling companies through the Temporary Employer-Employee Relief Scheme. To gain an insight into the sheme, the process required to participate and to see some templates of the required forms, please send an email to “[email protected]”. You will receive an automated response with all this information. We will also be providing more information on this and other relief measures in our next blog post next week.

As always, we’re here to help where we can. Please feel free to get in touch if you need help with any of the above on SimplePay.

Team SimplePay