Labour and Employment Minister Thulas Nxesi Photo: Ntswe Mokoena
  • 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.
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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.

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

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. 

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