Payouts of up to R6 700 per month: This is what workers in struggling firms could get from govt
- Employers whose businesses have been crippled by the coronavirus crisis can apply for funding to help cover worker salaries.
- The biggest payout may be up to R6 732 a month (for those earning more than R17 702), and the minimum will be in line with the minimum wage.
- But each company will first have to prove how badly the crisis hit them, before payments will be considered.
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Employers who have had to close their
businesses due to the lockdown, and can’t afford to pay their employees, may apply
for money from government to help pay salaries.
The Covid-19 Temporary Relief Benefit will cover a period of up to three months – during the lockdown, and also afterwards, if companies continue to struggle with their cash flow.
Companies will have to prove that their businesses have been severely damaged by the coronavirus crisis before they will get access to funding.
The payouts, called the special Temporary Employee/Employer Relief Scheme (TERS) and administered by the Unemployment Insurance Fund, will work on the same principal as maternity benefits. If a company can still afford to pay employees a part of their salaries, the TERS money will “top up” these payments – but employees can’t earn more than 100% of their current salaries.
The amounts paid will be a percentage of an employee’s salary, according to a legislated sliding scale from 38% (highest earners) to 60% (lowest earners).
The sliding scale stops at R17 702: All workers earning more than this will only get the 38% maximum benefit, which is R6 730 a month. (Previously Cosatu interpreted the gazetted regulations that the maximum payout would be R17 712 a month, but new stipulations from the UIF indicate that this is wrong.)
Companies who are struggling to pay salaries due to the coronavirus crisis, need to report this per email to Covid19ters@labour.gov.za. They will receive an automatic response outlining the application process.
Each company will be judged on its own individual merits before the Covid-19 Temporary Relief Benefit will be extended to them.
Companies need to be registered with the UIF already to secure payments for their workers. But the normal UIF rule that employees would accumulate one day’s payout for every four days’ work (up to certain maximums) will fall away for this benefit. All workers at approved companies will be entitled to these payments.
Last week, new wage payment regulations were gazetted for the clothing sector. According to those regulations, the UIF and employers will take turns to make weekly wage payments to employees during the lockdown.
More of these industry arrangements by bargaining councils are possible, which will vary from the normal TERS regulations, says Jan Truter, director of the labour law advisory platform Labourwise. The UIF has systems in place whereby UIF funds will be released to the bargaining councils, which can then be released to employees on a regular basis during the lockdown period.
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.
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