Last week, we began this three-part series to simplify and enhance your understanding of legal matters in HR.
Today, we break down key regulations that influence how workplaces should operate. Keep following this series to ensure your business stays on the right side of the law. And remember to subscribe to BizEdge Weekly so you won’t miss any updates in this series.
A. Employees' Compensation Act 2011
- The Act addresses matters related to compensation for workplace injuries or occupational diseases, replacing the Workmen Compensation Act 2004.
- Applies to employers and employees in both public and private sectors, excluding active Armed Forces members (except civilians in a civilian capacity).
- Employers must prevent workplace disabilities and maintain a Compensation Fund for employee welfare.
Procedures for Reporting an Injury:
- Employees or dependants must inform the employer within 14 days, detailing the occurrence.
- Occurrence can be at the primary workplace, with employer permission outside the usual workplace, during travel between workplace and residence, or while receiving remuneration or meals.
- Employers must report incidents to the Board within 7 days; failure to report is an offence.
Compensation and Responsibilities:
- There's no waiver of benefits or compensation rights by agreement between employer and employee.
- Employers must facilitate rehabilitation for work-related disabilities.
- Compensation includes mental stress and hearing impairment arising from employment.
Compensation in Case of Death:
- In case of death, the spouse is entitled to 85-90% of the deceased employee's monthly remuneration based on children and spouse's status.
- Children aged 21 or who have completed undergraduate studies are eligible for compensation.
- The board decides compensation for other dependants.
Permanent Disability or Disfigurement:
- Victims are entitled to compensation at 90% of their monthly remuneration until retirement age if under 55 years.
Fund Maintenance:
- Employers are required to contribute 1% of the total monthly payroll to the Fund.
- Fund sources include Federal Government grants, investment returns, and gifts/grants.
B. Pension Reform Act 2014 (PRA)
- The Act governs pensions in public and private sectors, facilitating the Contributory Pension Scheme.
- It is mandatory for organisations with 15 employees or more in the private sector; retirement benefits are non-taxable.
Expectations from Employee and Employer:
- Every employee must maintain a Retirement Savings Account (RSA) with a Pension Fund Administrator (PFA) and notify the employer.
- If an RSA is not opened within six months of employment, the employer can arrange one.
- Employers deduct and remit at least 8% of their monthly salary into RSA within seven days of payment.
- There’s an option for the employer to bear full contribution.
- Failure to deduct or remit attracts a penalty of at least 2% of the unpaid contribution.
- Employees can change Pension Fund Administrator (PFA)? once a year.
Access to Retirement Savings Account (RSA):
- Access is granted upon retirement or at age 50, with exceptions for health-related retirement.
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