Government initiatives for businesses and employees in the midst of COVID-19

The President of South Africa has announced a compulsory lockdown period from the midnight 26th of March 2020 until 16th of April 2020. This means that only essential operations can continue and work onsite, all other companies if they can must work from home. This means a huge financial impact on companies and can lead to retrenchments and staff members not receiving full or no salaries. As part of the guidelines that was published, companies don’t need to pay their staff if they don’t participate actively in the operations

With that said the government has put in place numerous initiatives to help relief the financial burden on employees and organisations, namely:

1. Small Business Development Programme
2. Unemployment Insurance Fund (UIF)
3. Temporary Employer/Employee Relief Scheme
4. Acceleration of ETI Claims
5. 20% PAYE Holdback

Small Business Development Programme

The state and numerous forums and companies are availing money for business that are experiencing financial strain due to the compulsory lockdown. Organisations who meets the following criteria can apply at https://smmesa.gov.za:

1. Business which are negatively affected due to the Coronavirus pandemic;
2. Companies must be 100% owned by South African Citizens;
3. Employees must be 70% South Africans;
4. Priority will be given to business owned by Women, Youth and People with Disabilities;
5. Be register and compliant with SARS; and
6. Be UIF compliant.

The following information will be required:

1. VAT Number
2. PAYE Number
3. Tax Number
4. Company Registration Number
5. Whether you need Financial or non-financial assistance required

Unemployment Insurance Fund (UIF)

The UIF will make funds available to ease the burden on employees that have contracted COVID 19 while working and who is not receiving a salary.

For an organisation that want to claim for the employees that they will not be able to pay, the following documentation will need to be submitted (please feel free to click on the link to download):

1. UI 2.1
2. UI19 and UI2.7
3. UI2.8
4. A Letter from the Employer confirming company shutdown or employee’s “temporary lay-off” is due to the Corona Virus
5. Copy of Employees ID

You will also need to phone the Response Team Contact person for your region informing them about the complete shutdown and that the company will not be able to pay salaries.

The same documentation will need to be submitted for an employee that contract the COVID 19 at work.

Temporary Employer/Employee Relief Scheme (TERS)

The Government has also launched TERS which will assist organisation in one of the following three processes:

• Wage Subsidy from UIF
• Wage Subsidy and Training Interventions for Employees
• Turn Around Solution Intervention

Only organisations that is in distress and meet the following requirements will be able assisted:

• Compliant with UIF. If not compliant sign an undertaking to become compliant in a stipulated timeframe.
• Demonstrate the will to embarked upon a turnaround or sustainable programme which will result in job preservation at the expiry of the funding.

The organisation will need to present the following documentation:

• Proof of employment and list of employees
• Salaries of Directors
• Dedicated bank account
• Registration with Central Supplier Database
• Power of Attorney
• Turnaround strategy implementation plan
• Report progress on the implementation plan

Acceleration of ETI Claims

ETI claims will be paid out monthly and not bi-annually. This will assist organisations with paying out wages and salaries for youth registered on the programme.

20% PAYE Holdback

A further guideline that the government has implemented is that organisation can withhold 20% of their PAYE monthly payments back for the next three months. This will assist organisations with cashflow.

Dalitso Holdings is operating through out the shutdown period remotely, should you have any questions or require any assistance please contact us on [email protected]