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As anxious South African workers, who are facing layoffs and loss of income during the lockdown period, await guidance on government help during this time, there is now an indication of how the Unemployment Insurance Fund will help pay their salaries.

The first payment regulations, for workers in the clothing industry, have just been gazetted.

The national bargaining council for the clothing manufacturing industry has reached an agreement with the Minister of Employment and Labour Thulas Nxesi  to ensure that workers are not left destitute with no income during the lockdown period.

Read: Lockdown: Your boss can force you to take leave – and cancel your December break

The UIF and companies will take turns to pay workers weekly salaries during the lockdown.

The UIF will pay the money to the council – into a specially created bank account. From there, it will be distributed to different companies. The regulations are firm that the money can’t be used for anything other than worker payments, and that anyone who abuses the money will be “immediately” prosecuted.

While South Africa will, for now, only be in lockdown for three weeks, the agreement makes provision for the possibility of a six-week lockdown.

This is how payments will be divided between employers and the UIF during that time:

Week 1: Employer pays for work during the week before the lockdown.

Week 2: The employer will pay any wages still owed for work already performed, with the balance made up by money from the UIF. Worker should get the equivalent of a full week's wage.

Week 3. Full wage, paid by employer.

Week 4: Full wage, paid by UIF.

Week 5: Full wage, paid by employer

Week 6: Full wage, paid by UIF.

The new regulations will also be extended to clothing employers who are not part of the bargaining council.

The UIF has assets of about R180 billion and both Cosatu and Business Unity South Africa have pressured government to use the money to help workers in need. Other sectors are still expected to announce their agreements with the UIF.

Other measures to help businesses during the lockdown include:

  • Tax-compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn liabilities over the next four months, and a portion of their provisional corporate income tax payments – without penalties or interest over the next six months.
  • South African Revenue Service (Sars) will also pay out employment tax incentive reimbursements every month – instead of twice a year – to get cash into the hands of compliant employers as soon as possible.

Earlier, President Cyril Ramaphosa said that temporary reduction of employer and employee contributions to the UIF and employer contributions to the Skills Development Fund are also being considered.

But as part of the latest agreement, the clothing sector has committed to continue paying UIF contributions during lockdown.

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