1

UIF Benefits – for reduced working hours

An employee (ie contributor) who loses income due to the implementation of a duly arranged company policy which results in  reduced working time, is entitled to claim and receive UIF benefits, if that employees’ total income falls below the benefit level that the employee would have ordinarily  received if the employee had become unemployed (irrespective of that employee still being employed). It is however subject to that employee having sufficient credits available (i.e. as a result of their UIF contributions whilst being employed).

The income received by the employee from reduced working time plus the value of UIF benefits calculated, may not exceed the benefits that would have been paid if the employee had become unemployed. Reduced working time benefits must be calculated based on the remuneration of the employee at the time that the reduced working time policy was implemented.

The new UI-2.1, UI-2.7, UI-6A and UI-19 forms (see attached Gazette) cater for the recording of reduced work time.

2

Nominated Beneficiary

An employee can nominate a specific beneficiary if the employee does not have a dependent child, a surviving spouse, or a life partner. This is done by submitting the nomination form (UI-35) on commencement of employment. The nominated beneficiary can be changed at any time by submitting a new nomination form

If the employee did not complete the required nomination form when they started their new employment, the UIF must accept, the nomination form completed at the employees’ previous employer. The new UI-2.6 and UI-35 forms make provision for recording of a nominated beneficiary.

3

Information to be submitted by the Employer (i.e. declaration)

An employer must within 7 days of the end of the month in which it commences activities as an employer, submit a completed declaration to the Commissioner. Every employer must provide the Commissioner with all information (i.e. the required employer and employee details) and must do so by submitting a declaration of their employees electronically (i.e. known in the payroll world as a UIF Declarations File) or by completing the UI-19 Form.

 

Some employers (e.g. domestic and small enterprise employers) may declare employees and pay contributions annually provided that the employee’s services are not terminated during that year. On termination during that year, the declaration must be done in the month of termination.

4

Forms used

The following regulations which refer to the UI-14 (Record of undertaking), UI-15 (Receipt of payment by employer), UI-16 (Issue of compliance) and UI-17 (Objection to compliance order) forms are repealed:

  • Regulations 10 (Securing an Undertaking)
  • Regulations 11 (Compliance Orders)
  • and Regulations 12 (Objection to Compliance Orders)

Regulation 13, which previously referred to the UI18 form (i.e. the Information about employee supplied by employer) has changed to refer to the UI-19 form only.

New form available to nominate a beneficiary:

  • UI-35

The following forms have also changed:

  • UI-2.1
  • UI-2.2
  • UI-2.3
  • UI-2.4
  • UI-2.5
  • UI-2.6
  • UI-2.7
  • UI-3
  • UI-4
  • UI-5
  • UI-6A
  • UI-19

Notes regarding the new UI-19 form:

  • Fax number was added (0866 323 503).
  • Employer’s branch number etc. has been removed.
  • Clarity has been provided re column D (i.e. Total/Gross Remuneration paid to the Employee Per Month) refers to remuneration as specified by the UIF Contributions Act.
  • Clarity re domestic employers - should provide their surname and initials as the trading name of their business.
  • Clarity re termination reason of ‘constructive dismissal’ (option 7). This can only be determined by the CCMA, Bargaining Council or Labour Court.
  • There is a new termination reason code 17 (this denotes reduced work time).
  • Only 2 reasons for non-contribution are now applicable (the rest have been repealed). These are:
  • temporary employee (i.e. employee worked for less than 24 hours per month)
  • no income paid for the payroll period

NB – this is causing confusion as it is not clear what non-contribution reason code should be used for:

  • commission only employees
  • employees in the National and Provincial spheres of Government
  • and employees in receipt of pension payment from employer

Although there has been discussion regarding these types of employees nothing official has been published. Our view is that if the UIF officials and / or Labour Centers require the new UI-19 form to be used then that is what employers should adhere to in order not to create any unnecessary delays for employees who need to claim UIF benefits.

The UIF officials still need to provide communication re how to handle the above three types of employees. This is currently resulting in employees being turned away at some of the Labour Centers in cases where their employers are producing “old UI-19 forms”.

5

Definition Update

Small Enterprise – this means “a small enterprise contemplated in Section 1 of the National Small Enterprise Act (1996)”

6

Effective Dates

The regulations have now been implemented. The publication of the notice was 28 December 2018

Please follow and like us: