COVID19 – Employers UIF & COIDA options

COVID-19 Lockdown – 27 March to 16 April 2020

Please note: The information provided in this blog is correct at the time of writing, but as this is an unprecedented and ever-changing situation, we will do our best to ensure we keep ourselves and our clients up to date. Please check back regularly for updates – we will also notify you of these by email and system notifications.

On Monday 23 March, President Ramaphosa announced a 21 day lockdown from 23:59 on Thursday 26 March. Many South Africans welcomed this but are also uncertain as to what this means for their employees and businesses. Over the past few days, the respective Governmental Departments have released information regarding plans to support companies and their employees through the COVID-19 pandemic.

Earlier in the week we let you know that our team has gone fully remote and are pleased to be able to support our clients and employees in this way. In some sectors, this mode of working can be adopted relatively easily and many have already done so; however, for a lot of sectors and employees this is unfortunately not an option.

For those employers who have to scale back or suspend regular activities, the following options exist:

Options for Healthy Employees Impacted by Reduced Hours or Temporary Closure

Where employees are healthy and able to work, but are prevented from doing so due to the lockdown, employers and employees can agree that annual leave be used to cover some or all of the lockdown period on full pay. You are also always able to extend extra paid leave days to all employees should you so wish.

Where none of the paid leave types are an option, employees can be put on unpaid leave. Employees impacted in this way are able to claim Unemployment Insurance Fund (UIF) benefits as a result of either reduced hours or temporary closure. To do this on Payroll, please end your employees’ service using code 17. If you simply record unpaid leave on the calendar, UIF will not be claimable by employees.

The government intends to extend UIF benefits for these employees for up to three months. If you’re paying your employees reduced pay, a partial UIF benefit will be available. Employees who receive no income will be entitled to full UIF benefits.

The required documents and application process are outlined at the end of this post.

Options for Employees who are suspected or diagnosed with COVID-19

What if the employee is healthy?

The requirement that an employee suspected of, or is diagnosed with COVID-19, must self- isolate for 14 days remains in place. This period can be covered using an employee’s sick leave as with any other instance of illness. If the employee has no sick leave, you can agree to have them use annual leave otherwise they may be placed on unpaid leave. As above, the option to grant additional paid leave is also available. For all of these, record leave as usual.

Where the employee has had to be placed on unpaid leave as a result of contracting COVID-19, the following options to receive some income exist:

1. Apply for an illness benefit through UIF

• This covers the 14 day isolation and requires several documents, including a letter of agreement signed by employer and employee.
• This period can be extended if required.
• Full details on documents required and the application process can be found at the end of this post.

2. Apply for compensation for Occupationally Acquired COVID-19 Disease, through the recently amended Compensation for

Occupational Injuries and Diseases Act (COIDA)

1. This is available if the employee contracted COVID-19 in their place of work or on a business trip to another country or area.
2. More details can be found in this Government Notice and the process to claim is outlined at the end of this post.

Procedure to Follow

As mentioned above, we have laid out the process which needs to be followed in order to claim UIF for employees unable to continue working as usual over lockdown or due to illness.

Procedure for Healthy Employees Impacted by Reduced Hours or Temporary Closure

To claim UIF for a reduction in hours or temporary closure, the following must be completed:

Contact and inform the relevant provincial department representative of your temporary closure/reduction in hours. The contact details for each of the offices can be found on page 3 of the Easy Aid Guide for Employers.

The following forms and documents need to be completed for each employee:

• UI 2.1 (application form)
• UI19 (which can be completed through SimplePay via the Filing tab) and UI 2.7 (completed by Employer)
• UI 2.8 (banking details form completed by the bank)
• A letter from the Employer confirming company shutdown or employee’s “temporary lay-off” ( or reduced work time ) is due to the Corona Virus
• Copy of Employee’s ID document

This may appear a daunting number of forms, but it is worth noting that the provincial departments will provide the necessary assistance with the application and payment of this benefit type.

Additionally, if your business employs 50 or more employees, who may be subject to temporary lay-offs, a rapid response team has been formed to aid you with this process.

Procedure for Employees who are Suspected or Diagnosed with COVID-19

To claim UIF for an illness benefit, the following must be completed:

1. Fill in the following forms:
2. A confirmation letter from both the employer and employee, stating that they have agreed to 14 days of “special leave”, due to COVID-19.
3. UI 2.2 (medical portion to be ignored, as this is substituted by the above letter. This is because the employee will already be in quarantine).
4. UI 19 (which can be completed through SimplePay) and UI 2.7 (completed by Employer)
5. UI 2.8 (banking details completed by the bank)
6. Copy of employee’s ID document.

An application can be lodged in one of the following ways:

• Online at www.ufiling.co.za
• Email or fax the nearest UIF processing centre. (information found on page 7 of this link)

Unlike temporary closure, there is no bespoke assistance for the filing of this application. It is likely though that there are fewer employees that qualify for this benefit, lessening the administrative load. If you do experience any difficulties, we would encourage you to touch base with your nearest UIF processing centre for guidance.

At the end of the 14 day period a UI3 form needs to be completed, for the payment to be executed into the employee’s bank account. If the employee remains ill beyond the 14 day period, they must obtain a medical certificate from a medical practitioner and submit a further UI3 in order to be able to continue to claim the benefit.

Procedure for Claiming under COIDA

There are a few key components to being able to claim under this system. The following are required elements:

• The employee must test positive for the COVID-19 virus (as defined in COIDA).
• The contraction of the virus must arise out of and happen in the course of employment.
• There must be a realistic and logical explanation for the exposure to COVID-19, which occurred in the course of employment.

Originally posted on the Calypso Accounting Resource Centre