In our previous bulletins (dated 15 and 23 February 2021 and 12 March 2021, Amendment to the National Minimum Wage, Calculation of the National Minimum Wage for Domestic Workers and Part 3: Domestic Workers And The Law – The Compensation For Occupational Injuries And Diseases Act, 1993) we set out respectively –
- the amendments to the national minimum wages contained in Schedule 1 and 2 of the National Minimum Wage Act, 2018, effective from 1 March 2021;
- how the minimum wage of a domestic worker should be calculated; and
- the position of domestic workers under the Compensation for Occupational Injuries and Diseases Act, 1993.
In this final bulletin regarding domestic workers and the law, we focus on the rights and obligations of employers in respect of their domestic workers under the Unemployment Insurance Act, 2001.
As previously mentioned, domestic workers were also excluded from the operation of the Unemployment Insurance Act, 1966. But UIF benefits were extended to them under the Unemployment Insurance Act, 2001 when the Act came into effect in 2002.
The unemployment legislative framework, namely the Unemployment Insurance Act, 2001 and the Unemployment Insurance Contributions Act, 2002, applies to all employers and employees (including domestic workers). However, relevant to domestic workers, employees working less than 24 hours per month for an employer are excluded from contributing to the UIF.
A contributor who is employed as a domestic worker by more than one employer and whose employment is terminated by one or more employers is, despite still being employed by others, entitled to benefits in terms of the Unemployment Insurance Act if the contributor’s total income falls below the benefit level that the contributor would have received if he or she had become wholly unemployed.
Both the contribution payable and the benefit to which a domestic worker would be entitled is based on a percentage or sliding scale of what he or she was earning, although, for purposes of the UIF, earnings above certain thresholds are ignored. For purposes of determining contributions, so much of the remuneration that exceeds R14 872.00 per month is not taken into account.
Registration, Returns, and Contributions
- Employers are required to register their domestic workers with the Unemployment Insurance Fund.
- This can be done by completing and submitting a UI-19D Form (information about employee) and a UI-8D Form (application for registration as an employer of domestic employees). These forms can be accessed here.
- Registration can be done telephonically, by email and by registered mail (https://www.gov.za/faq/government-services/how-do-i-register-my-domestic-worker-uif). More information on how to register with the UIF is available on the Department of Labour website.
- Employers are required to submit monthly returns of employee particulars to the UIF.From these returns, the UIF builds a history of its contributors.
- When an employee claims benefits, the information required for the benefit calculation will be obtained from the database.
- These returns can be made electronically via the UIF website (upon registration for the online electronic filing system).
- The contribution rate payable by an employeris 1%of the remuneration paid to an employee by the employer.The employee contribution is the same.
- An employer is required to deduct the employee’s contribution (1%) from the employee’s remuneration.In the event that an employer fails to make this deduction, the employer is nevertheless liable for the employee’s contribution to the UIF and may not deduct any arrear amounts from the employee’s remuneration.
- Contributions are based on remuneration as defined in the Income Tax Act, 1962, excluding:
- non-employment related payments such as pensions and annuities;
- amounts paid for loss of employment, such as retrenchment pay;
- one-time payments such as lump sum payments from pension, provident or retirement annuity funds;
- restraint of trade payments; or
- commission payments.
- Payment of both the employer and employee contribution must be made to the UIF monthly.
UIF benefits include not only unemployment benefits, but also illness, maternity, parental, adoption and commissioning parental benefits. The scheme of the UIF is to assist workers who lose their employment and income for various reasons. But it also, through the TERS scheme, assisted registered employers to pay their domestic workers even where their returns may not have been up to date.
We hope that our series of bulletins regarding domestic workers and the law will assist employers with understanding their rights and obligations in respect of domestic workers.
These rights and obligations include, but are not limited to, compliance with the national minimum wage, its calculation and the various registration and reporting requirements in respect of the Compensation for Occupational Injuries and Diseases Act and Unemployment Insurance Act. Domestic workers are also employees for the purposes of the Labour Relations Act and the Basic Conditions of Employment Act.
This bulletin was prepared by partner Nigel Carman, associate Andi Michalow and candidate attorney Thabang Nthatisi.