Here's what govt will pay employees of closed, distressed businesses during lockdown
- Government has just gazetted new details about state payments to employees of companies that have to close during lockdown.
- Salaries of these employees will be paid via a new scheme which is part of the Unemployment Insurance Fund.
- High earning employees may get up to 38% of their current salaries (up to a cap of R17 712), while the minimum payment is the minimum wage.
- For more stories, go to Business Insider's home page.
Employees at companies that have to close their doors during lockdown may receive payments from government under a new scheme.
The amounts paid will be a percentage of your salary, according to a legislated sliding scale from 38% (highest earners) to 60% (lowest earners).
"The salary benefits will be capped to a maximum amount of R17 712 per month, per employee and an employee will be paid in terms of the income replacement rate sliding scale (38 % - 60%) as provided in the UI [Unemployment Insurance] Act," according to the regulations that was gazetted on Thursday by Labour and Employment Minister Thulas Nxesi.
According to Matthew Parks, parliamentary coordinator of Cosatu, this means that high-earning employees (roughly those earning more than R45 000 a month) may be entitled to the maximum payout of R17 712 (which is around 38% of R45 000).
If you currently earn R17 700 a month, you may only get a percentage of that. The minimum payment will be equal to minimum wage of the sector.
Employers that have to close their businesses due to the lockdown, and can’t afford to pay their employees, will qualify for a Covid-19 Temporary Relief Benefit.
Staff will get salaries from a special Temporary Employee/Employer Relief Scheme (TERS) that has been created as part of the Unemployment Insurance Fund (UIF). Companies need to be registered with the UIF already to secure payments for their workers.
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.
Companies who have to close their doors during the lockdown need to report this per email to Covid19ters@labour.gov.za. They will receive an automatic response outlining the application process. But at the time of publishing, Business Insider has not received a response to an initial email.
Earlier on Wednesday, 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.
Receive a daily update on your cellphone with all our latest news: click here.
Also from Business Insider South Africa:
- Covid-19 update: Confusion around rules as SA prepares for lockdown
- If you smoke, prepare to argue cigarettes are a basic good – or go without during lockdown
- Please keep donating blood during lockdown, say blood services – here’s where and how you can
- Why South Africans should get the flu vaccine now to help the fight against Covid-19
- Taxis will only be allowed on the road during specific hours
- South Africa will be tracking cellphones to fight the Covid-19 virus
- Car crashes, violence down in SA after new alcohol rules, emergency responders say