Since 2002, all domestic workers in South Africa who work more than 24 hours a month are legally entitle to be registered with the Unemployment Insurance Fund (UIF).
If you have a housekeeper, nanny, gardener, or driver who works in and around your home, you’ll need to complete their registration with the UIF – here is a quick guide to speed up this important process.
What the UIF does
Simply put, the UIF is a huge, government-backed insurance policy that’s designed to protect salary earners if they lose their jobs. Since 2002, domestic workers have been entitled to UIF benefits if they are dismissed or are retrenched. The UIF will pay out a weekly or monthly amount that is meant to help the person survive financially while they search for a new job.
How much it will cost you
- When you register your domestic worker with the UIF, you’re agreeing to contribute an amount equal to 1% of their salary per month to the fund.
- Your employee is expected to contribute a further 1% per month, but you can contribute this amount on their behalf and either choose to deduct it from their wages or pay it yourself as an act of good faith.
For a domestic worker earning R2000 a month, this amounts to a monthly payment of either R20 (1%) or R40 (2%) from the employer. These amounts are affordable to anyone, and will keep you on the right side of the law while protecting your domestic worker from the uncertainty of having no backup income if they lose their job.
Penalties for non-compliance
Employers who fail to register their workers with the UIF could face serious legal consequences, yet many people have still haven’t registered their helpers and gardeners – the 1 or 2 percent monthly contribution is a small price to pay to avoid hefty fines or even criminal charges.
South African law allows for a fine of R5000 or more per household for non-compliance with UIF registration. This is equal to over 100 months (almost a decade) of UIF contributions on a salary of R2000 a month – it should be clear from these figures that complying with the UIF is the logical thing to do.
For more information on the UIF and other labour issues, contact the Northwood team today. We’ll schedule an appointment with you and ensure that your company’s HR policy is legally compliant and effective.