Wednesday, January 25th, 2017
Sanette de Jager
– What is UIF?
UIF is the abbreviation for the Unemployment Insurance Fund. Many owners of small businesses are under the impression that due to the size of their business they need not pay UIF. However, the Act compels all employers to pay UIF.
When an employee’s services are terminated, he/she may apply to the UIF for benefits. These benefits are only available if he/she contributed to the UIF while employed.
An employee may not claim if he/she has been dismissed, suspended or has absconded. He/she may claim should the Commission of Conciliation, Mediation and Arbitration (CCMA) consider the resignation to be constructive dismissal.
To be considered for the benefits, the employee must be registered as a work-seeker. The employee must apply for the benefits as soon as he/she becomes unemployed or within six months following termination of his/her employ.
It is the employers’ duty to register themselves as well as their employees for UIF and the contributions have to be paid each month.
– Applying for UIF
The Unemployment Insurance Act and the Unemployment Insurance Contributions Act apply to all employers and employees. However, the Acts exclude the following cases from the UIF:
– employees who work less than 24 hours per month for an employer;
– learners under a learnership as outlined in the Skills Development Act;
– government employees;
– foreigners working on contract;
– employees who receive a monthly old age pension from the government; or
– employees who only earn commission.
Domestic workers and their employers have been included in this Act since 1 April 2003. If a domestic worker works for you for more than 24 hours per month, he/she must be registered for UIF.
– Registration and declarations
Employers must register themselves and their employees as soon as they employ someone. Employers must notify the UIF of any changes (e.g. new employees or changes in salary) before the seventh of each month in terms of section 56 of the Unemployment Insurance Act.
– Deductions and payment of contributions
In terms of sections 7, 8 and 9 of the Unemployment Insurance Contributions Act, employees have to pay 1% of their employees’ salaries plus 1% which they add themselves, to the UIF before the seventh of each month.
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