EMPLOYER/EMPLOYEE TEMPORARY RELIEF SCHEME COVID-19 LOCK DOWN

Dear Clients,

The Department of Labour, through the mechanism of the Unemployment Insurance Act, has set up a relief scheme for employees that have, due to the COVID-19, had their employer close operations.

IMPORTANT POINTS OF CONTACT RELATED TO THIS ARTICLE

 

DMR Attorneys
 
www.dmrlaw.co.za
 
fred@dmrlaw.co.za
 
074 589 8800
 

 

 

Department of Labour
 
www.labour.gov.za
 
covid19ters@labour.go.za
 
Dedicated telephone line
012 337 1997

CRITERIA

In order to qualify the following needs to be in place:

Employees must not be receiving payment from the employer.
The employer must be registered with the UIF and have made the relevant contributions. In the event that the employer is in default, the benefit may still be available subject to the employer signing a acknowledgement of debt in respect of the contributions in arrears.
The employer must have had to close its operations for a period of 3 months or less as a result of the Covid-19 pandemic and have suffered financial distress.
The employer must comply with the application procedure for the financial relief scheme as detailed below.
WHAT IS PAID

The benefit will only cover the cost of the salaries of the employees during the temporary closure of the business as a result of the Covid-19 pandemic.
The amount to be paid is capped at a maximum of R 17 712, 00 per month, per employee. An employee will be paid in terms of the income replacement sliding scale (38%- 60%) as provided under the UI Act
Regardless of what amount the employee is entitled to as determined by the sliding scale referred to above, the employee will at a minimum receive the minimum wage for the sector concerned.
APPLICATION PROCEDURE

The employer must report its closure by sending an email to covid19ters@labour.go.za. An automatic response will be received setting out what information is needed, and the documents required to be completed and submitted by the employer.
The employer must provide the following to the UIF:
A Letter of Authority, on an official company letterhead, authorising a person designated by the Employer to lodge a claim on behalf of the Employer.
The completed Memorandum of Agreement (MOA) between the UIF, Bargaining Council or Employer as the case may be.
Completion of the prescribed templates detailing the required information from the Employer. The prescribed templates will be received in the automated return email referred to above.
Written proof of the last three months employee(s) salary(ies).
Confirmation of the employers’ bank account details in the form of a certified latest bank statement. In terms of the MOA, it appears that a separate bank account, apart from the employer’s normal business account, would need to be supplied.
PAYMENT TO EMPLOYEES

Payment of the claimed amount will be made in one bulk payment per month to the employer into the designated bank account.
The Employer must then, within 5 days, distribute the funds into the bank account of the individual employees.
The employer will be required to provide proof as determined by the UIF that employees have in fact been paid in order to receive any further payments in terms of the scheme.
The employer will be required to maintain accurate accounting records for a period of 5 years relating to payments received. These accounts must be kept separate from the normal accounts of the employer.

Please contact DMR should you require any assistance with the above.

Regards
Fred Joubert
fred@dmrlaw.co.za
074 589 8800

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