UIF defaulters face penalties

27 January 2003

Less than 10% of South Africa’s employers have complied with the law by forwarding their employees’ particulars to the Unemployment Insurance Fund (UIF), according to a study released in Pretoria on Wednesday.

The study was conducted by the UIF to gauge the level of compliance since the inception of new UIF Act in April last year.

The Act requires that employers provide the fund with payroll information. To ensure better service delivery, the UIF last year adopted an “e-approach” involving electronic installation of payroll information.

According to the UIF Act, anyone who is out of work due to a situation created by the employer is entitled to financial benefits.

In terms of the Act, employees are required to pay one percent from their monthly income to their employer, who is required to add another percent before submitting the amount to the UIF Commissioner.

The Act also covers a wide range of benefits, including unemployment, illness and maternity benefits, as well as benefits related to adoption and dependents.

“Our records show that there are about 400 000 employers countrywide paying UIF. However, only 30 000 of them have forwarded their employees’ particulars to the Fund,” UIF Commissioner Shadrack Mkhonto said.

Mkhonto said the remaining 370 000 employers may face penalties, but more importantly, they are putting their workers at risk. “Access to unemployment benefits will be twice as difficult for workers who are not registered on the UIF database,” said Mkhonto.

He stressed that the collection of payroll information is the cornerstone of the UIF’s new database system, which replaces the traditional “Blue Card” as a record of payment and method of claiming benefits, streamlining the administration of the Fund and bringing an end to long queues of applicants.

“It means that employees need only submit a claim form and produce a valid identity document to access benefits, as opposed to the previous system where numerous documents were needed to process a claim.”

However, said Mkhonto, should an employee not appear on the UIF database, “a lengthy process of verifying data will have to be undertaken before benefits can be paid to the employee, thus inconveniencing both employers and employees.”

Employers may submit employee information manually – the UI19 form is obtainable at your nearest labour centre – or on the UIF Web site, or by e-mailing a payroll extract to the UIF database administrator, or via a file transfer protocol (FTP) obtainable from UIF offices.

For more information, phone the UIF Call Centre on (012) 337 1700.

Source: BuaNews