In February this year, South Africa hit international headlines when 955 gold miners were safely brought back to the surface after having been trapped underground for days following a power cut and back-up generator failure. The incident at the Beatrix mine in Welkom was a reminder of the dangers associated with the mining sector.
South Africa is one of the world’s leading gold producers, and safety in the industry has often come under the spotlight. For instance, fatalities in 2017 reportedly hit 82, up from 73 in 2016, the lowest on record.
But besides increasing day-to-day safety levels, what else can employers do to help at-risk employees in this and other sectors, and what legislation exists for their protection?
COID and COIDA
The Compensation for Occupational Injuries and Diseases Act (COIDA), 130 of 1993 as amended, requires that employees be paid compensation if they are injured at work, contract an occupational disease or die as a result of occupational injuries or disease. COIDA replaced the Workman’s Compensation Act of 1941 and is wider in scope.
The Compensation Fund (CF) administers COIDA, but the Act also empowers the Minister of Labour to licence a mutual association of its choice in order to provide COID benefits to workers in certain industry classes.
Rand Mutual Assurance (RMA) is currently licenced to provide COID benefits and has done so for more than 120 years. Its licence covers the administration of mining and mining-related industries. Employers have the option to be administered either by RMA or by the CF.
COIDA covers how and when employees who are injured at work, or who contract an illness or disease in the workplace, are compensated. The Act sets out the legal requirements relating to tariffs, compensation values and limitations on workers’ claims.
The benefits paid to staff members cover medical examinations and treatment, disability certification and compensation. If they die because of injuries that occurred in the workplace or because of an occupational disease, the deceased’s dependents may also qualify for benefits. These benefits are paid from the CF, which is funded from compulsory contributions.
Any employer operating a business/trade in South Africa must register with the Compensation Commissioner. Failure to do so could result in fines and penalties.
What is defined as an occupational accident?
The Act defines an occupational accident as one that arises out of, and in the course of, an individual’s employment, leading to personal injury, illness or death. This means that employees can submit a claim for benefits if they are hurt in an accident while undertaking their work/job.
What is defined as an occupational disease?
Contained within the Act is Schedule 3, which details the occupational diseases that are covered by the legislation. Occupational diseases are illnesses caused by substances, chemicals or any agents that staff members are exposed to in the workplace. An example here would be asbestosis, which is caused by prolonged exposure to asbestos but can take many years to manifest.
How are funds raised to cover COID benefits?
As previously mentioned, employers are legally required to register in order to ensure their employees are covered by COID benefits, and they pay premiums to either RMA or the CF. The premiums paid are based on a combination of the earnings paid to staff, subject to a maximum earnings level, and the risk associated with the industry in which the employer operates.
As part of the process of registering for COID, organisations must complete an annual declaration, which details the earnings of all their employees. The declaration is referred to as the Return of Earnings (ROEs), or form (W.As.8), and must be submitted annually by 31 March.
Section 83(6) (b) of COIDA lays out the penalties for failing to submit the relevant forms. As an aside, the filing deadline for the CF has been extended this year to 31 May 2018. This means that filing can now take place between 1 April and 31 May 2018.
The ROE/W.As.8 form for the year of assessment starting 1 March 2017 to 28 February 2018 has also been revised and was published on 27 March 2018 in the Government Gazette notice number 41529. The previous form was repealed with immediate effect.
The prescribed maximum earnings amount has increased from R403,500 (US$33,656) to R430,944 (US$35,945). At the same time, the minimum assessment amount increased from R1,080 (US$90) to R1,153 (US$96) per annum.
Submissions must be made to either RMA or the CF. Once the form is received, the respective body will generate an invoice for the premium payment. The invoice is payable within 30 days of the invoice date, or in instalments if the necessary arrangements have been made with the relevant body. Once the payment has been received and cleared, employer are deemed to be “in good standing” in terms of the COIDA legislation.
Employers also have the option of submitting the required documentation electronically on the Department of Labour’s website.
Severe penalties can be imposed for non-compliance, and criminal proceedings will be instituted for misrepresentation of facts.
Conclusion
As with any other legislation affecting payroll, it is important that global payroll professionals ensure their employer remains compliant. But they also have an additional responsibility in relation to COIDA as non-compliance may result in delays in paying COID benefits to employees, or in the worst case, mean they are not eligible at all.
Sharon Tayfield is a senior manager, with extensive experience in global outsourcing and a special interest in payroll. She has undertaken senior management roles at a range of multinational companies, including a wholly-owned subsidiary of Anglo America where she was financial director. Prior to her current role, Sharon was chief operating officer for a payroll service company specialising in outsourced services to Africa and the UK.
In February this year, South Africa hit international headlines when 955 gold miners were safely brought back to the surface after having been trapped underground for days following a power cut and back-up generator failure. The incident at the Beatrix mine in Welkom was a reminder of the dangers associated with the mining sector.
South Africa is one of the world’s leading gold producers, and safety in the industry has often come under the spotlight. For instance, fatalities in 2017 reportedly hit 82, up from 73 in 2016, the lowest on record.
But besides increasing day-to-day safety levels, what else can employers do to help at-risk employees in this and other sectors, and what legislation exists for their protection?
COID and COIDA
The Compensation for Occupational Injuries and Diseases Act (COIDA), 130 of 1993 as amended, requires that employees be paid compensation if they are injured at work, contract an occupational disease or die as a result of occupational injuries or disease. COIDA replaced the Workman’s Compensation Act of 1941 and is wider in scope.
The Compensation Fund (CF) administers COIDA, but the Act also empowers the Minister of Labour to licence a mutual association of its choice in order to provide COID benefits to workers in certain industry classes.
Rand Mutual Assurance (RMA) is currently licenced to provide COID benefits and has done so for more than 120 years. Its licence covers the administration of mining and mining-related industries. Employers have the option to be administered either by RMA or by the CF.
COIDA covers how and when employees who are injured at work, or who contract an illness or disease in the workplace, are compensated. The Act sets out the legal requirements relating to tariffs, compensation values and limitations on workers’ claims.
The benefits paid to staff members cover medical examinations and treatment, disability certification and compensation. If they die because of injuries that occurred in the workplace or because of an occupational disease, the deceased’s dependents may also qualify for benefits. These benefits are paid from the CF, which is funded from compulsory contributions.
Any employer operating a business/trade in South Africa must register with the Compensation Commissioner. Failure to do so could result in fines and penalties.
What is defined as an occupational accident?
The Act defines an occupational accident as one that arises out of, and in the course of, an individual’s employment, leading to personal injury, illness or death. This means that employees can submit a claim for benefits if they are hurt in an accident while undertaking their work/job.
What is defined as an occupational disease?
Contained within the Act is Schedule 3, which details the occupational diseases that are covered by the legislation. Occupational diseases are illnesses caused by substances, chemicals or any agents that staff members are exposed to in the workplace. An example here would be asbestosis, which is caused by prolonged exposure to asbestos but can take many years to manifest.
How are funds raised to cover COID benefits?
As previously mentioned, employers are legally required to register in order to ensure their employees are covered by COID benefits, and they pay premiums to either RMA or the CF. The premiums paid are based on a combination of the earnings paid to staff, subject to a maximum earnings level, and the risk associated with the industry in which the employer operates.
As part of the process of registering for COID, organisations must complete an annual declaration, which details the earnings of all their employees. The declaration is referred to as the Return of Earnings (ROEs), or form (W.As.8), and must be submitted annually by 31 March.
Section 83(6) (b) of COIDA lays out the penalties for failing to submit the relevant forms. As an aside, the filing deadline for the CF has been extended this year to 31 May 2018. This means that filing can now take place between 1 April and 31 May 2018.
The ROE/W.As.8 form for the year of assessment starting 1 March 2017 to 28 February 2018 has also been revised and was published on 27 March 2018 in the Government Gazette notice number 41529. The previous form was repealed with immediate effect.
The prescribed maximum earnings amount has increased from R403,500 (US$33,656) to R430,944 (US$35,945). At the same time, the minimum assessment amount increased from R1,080 (US$90) to R1,153 (US$96) per annum.
Submissions must be made to either RMA or the CF. Once the form is received, the respective body will generate an invoice for the premium payment. The invoice is payable within 30 days of the invoice date, or in instalments if the necessary arrangements have been made with the relevant body. Once the payment has been received and cleared, employer are deemed to be “in good standing” in terms of the COIDA legislation.
Employers also have the option of submitting the required documentation electronically on the Department of Labour’s website.
Severe penalties can be imposed for non-compliance, and criminal proceedings will be instituted for misrepresentation of facts.
Conclusion
As with any other legislation affecting payroll, it is important that global payroll professionals ensure their employer remains compliant. But they also have an additional responsibility in relation to COIDA as non-compliance may result in delays in paying COID benefits to employees, or in the worst case, mean they are not eligible at all.
Sharon Tayfield is a senior manager, with extensive experience in global outsourcing and a special interest in payroll. She has undertaken senior management roles at a range of multinational companies, including a wholly-owned subsidiary of Anglo America where she was financial director. Prior to her current role, Sharon was chief operating officer for a payroll service company specialising in outsourced services to Africa and the UK.
