May 2020 1st Edition

UIF to help pay wages of distressed companies

Written by Silusapho Nyanda

Employment and Labour Minister Thulas Nxesi re-acted swiftly to minimise income loss during the COVID-19   lockdown. “Employers are encouraged to continue to pay employees but where this is not economically possible, we have creat- ed a special benefit under the Unemployment Insurance Fund (UIF),” he says.

Called the COVID-19 Temporary Employee / Em- ployer Relief Scheme (TERS), the benefit is available  to companies that, as a direct result of the pandemic, have to close their operations for three months or less. The fund covers some of the costs of employee salaries.

TERS is de-linked from the UIF’s normal benefits. Payments are capped at R17 712 per month for each employee, with the amount to be paid out determined by the income replacement rate sliding scale of between 38 and 60 percent.

Nxesi says: “In instances where companies decide to close for a short period as a precautionary measure, the short-term UIF benefi will kick in.” He says that once the UIF is informed of the shutdown, assistance will be provided with the  processing of claims.

Businesses applying for funding must submit the following documents to the UIF:
• the completed agreement between the UIF, bargain- ing council and employer,
• a completed prescribed template containing em- ployer information,
• evidence of the past three months’ employee salaries,
•  confirmation of banking details in the form of a certified current bank statement,
• a letter of authority on an official company letter- head, granting permission to the individual  specified to lodge a claim on behalf of the company.

In the case of an employee falling sick and having to be placed under quarantine, the Illness Benefit will be applicable. This benefit will pay out once confirmation of the quarantine is received from both the employer and the employee. Should an em- ployee be quarantined for more than 14 days, a medical certificate from a medical practitioner must be submit- ted with a continuation of payment form.

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