Do you know which staff benefits are mandatory in terms of law?

The Basic Conditions of Employment Act (BCEA) stipulates the minimum requirements that every business should provide to their employees. Hereunder are the details you need to be compliant.

1. Annual Leave

Fulltime employees – At least 21 consecutive days, including weekends excluding Public Holidays. This is 15 working days for employees who work Monday to Friday. This is 18 working days for employees who work Monday to Saturdays.

Part time employees – One day for every 17 days worked OR 1 hour for every 17 hours worked.

The monthly accrual of annual leave for an employee who is entitled to 15 working days is 1.25 days.

The monthly accrual of annual leave for an employee who is entitled to 18 working days is 1.5 days.

TIP - Payment of annual leave owing is only made on termination of employment. It is illegal to offer payment in place of granting annual leave.
TIP - Employers may only grant leave up to 6 months after the end of the annul leave cycle.
NB – Any unused annual leave is carried over to the following year.

2. Sick Leave

Employees are entitled to the number of days they would regularly work in 6 weeks, every 3 years. For example, a 5 day worker is entitled to 30 days sick leave every 3 years. A 6 day worker is entitled to 36 days sick leave every 3 years.

NB - However, during the first 6 months of employment, employees are entitled to 1 day paid sick leave for every 26 days worked.

When do the annual or sick leave cycles commence?

On the employee’s start date /or commencement of employment with the organisation in accordance with their contract of employment.
Please bear in mind, that each employee’s annual leave and sick leave cycles will vary in accordance with their length of service for annual leave and the number of 3 year cycles they have completed for sick leave.
If you use a HR Information System and a module for Leave is included, the system will automatically calculate the monthly annual leave and sick leave accruals & other leave entitlements for you and will carry over the correct balance to the new month after the system is rolled over after each pay period is closed.

NB – Any unused sick leave remains available to the employee during the 3 -year sick leave cycle. At the end of the sick leave cycle any unused sick leave is forfeited and does not carry over the new cycle.

3. Maternity Leave

Pregnant employees are entitled to at least 4 consecutive months of maternity leave. Maternity leave usually begins 4 weeks before the expected birth date, but employees may begin their leave earlier. This may be under the advice of their Doctor / Health Practitioner and in which case the employee should provide a letter to the employer from the Doctor that states the date that maternity leave should commence and possibly include the reasons for the high risk pregnancy.

Employers are not obliged to pay the employee during this time however, the employee’s employment is secured during the maternity leave period. UIF (Unemployment Insurance Fund) will cover 60% of the employee’s salary for up to 121 days.
The Employer should provide the employee with a UI-19 form just before the commencement of the maternity period, so that the employee can register for maternity benefits with the UIF office.

NB – Please bear in mind that if the employee has made a claim for maternity benefits from the UIF office within the immediate 4 years prior, UIF will only pay a prorate portion of the benefit based on the amounts paid during the previous claim.

4. Paternity Leave

This benefit is 10 days unpaid. Employees may claim 66% of their regular earnings from the UIF subject to the maximum income threshold.

In the case of adoption, the child must be younger than 2 years old.

5. Family Responsibility Leave

Certain South African employees are eligible** to receive paid leave under the following circumstances:

Birth of a child.
To care for a child that has fallen ill.
Or upon the death of an immediate family member defined as follows – spouse, life partner, parent or adoptive parent, child, adopted child, grandchild, grandparent or sibling.

**Only an employee who has worked for longer than four months for the same employer, and who is employed on more than four days per week with the same employer, qualifies for family responsibility leave.

What is the entitlement?

Employees that qualify for Family Responsibility Leave are entitled to 3 days additional paid leave per annum.

NB – Any unused benefit is not carried over to the next year. It is forfeited.

6. Overtime Pay

Employers are required to pay their employees overtime pay. Only employees that fall under the Earnings threshold are entitled to overtime pay. The Earnings threshold is determined by the Minister of Labour over regular periods and the amendments usually take effect on 1st April.

Overtime is capped at 3 hours per day and 10 hours per week.
Employees can agree to work up to 15 hours overtime, but only for up to 2 months of a year.
Overtime is paid at 1.5 times the standard hourly rate.
Employees who regularly work on Sundays must be paid 1.5 times their regular wage. However, employees who do not usually work on Sundays must be paid double their regular wage.
An employee may agree to accept paid time off in exchange for working overtime.

7. Unemployment Insurance Fund

Both the employer and employee contribute 1% each to the Fund monthly. This fund is setup to offer temporary financial support in cases of unemployment, adoption, parental leave, or illness. Dependents of deceased contributors may also claim from the Fund.

8. Compensation for Occupational Injuries & Diseases (COIDA)

COIDA is a program that compensates workers injured or infected with diseases during their employment. The program also covers dependents of workers who die on the job as a result of work related accidents or contraction of occupational diseases.

Employers submit a Return of Earnings report for COIDA purposes to the Compensation Commissioner by 30 June each year.
The Compensation Commissioner assesses the information included in the Return of Earnings and forwards an invoice to the Employer to pay the annual amount due for COIDA. Payment of this invoice is payable within 30 days of the date of the invoice.
Without this ‘insurance’, employers are held liable for the costs of an injured employee’s medical treatment and are also open to civil claims in respect of medical costs and compensation for loss of earnings, permanent disablement, death and even pension payments.

9. Skills Development Levy

This is a tax levied against businesses to develop and improve workplace skills. Employers contribute 1% of the total amount paid in salaries to employees each month. Employees do not pay towards the Skills Development Levy.

The employer pays the 1% levy over to SARS monthly along with PAYE and UIF contributions using the EMP201 form and process.
SARS distributes the Skills Levies received to the National Skills Fund and the relevant SETA (Sector Education Training Authority) that the employer belongs to.
The employer will have access to a mandatory grant paid by the SETA from Skills levies funds paid over by the employer during the prior year, provided they submit a Workplace Skills Plan and an Annual Training Report to the SETA each year by no later than 30 April that meet with SETA requirements.

A final word on benefits that are not required by law-

These benefits typically include the following –

Retirement Funds (Pension and Provident Funds)
Private medical aid cover
Death in service, Funeral cover, Disability or Income Protection
Annual Bonus/ 13th cheque/ and Performance Bonus
Annual Increases

If these benefits are made available to employees, the rules and regulations of these benefits are driven by internal company policy and not by external legislation. Each organisation may have different rules and regulations that govern the benefit offering and membership access.

In the case of annual increases and the payment of bonuses, reference is typically made to business financial performance the year prior.

Larger organisations are in a better position to provide additional benefits to their employees. However small businesses struggle to compete to provide the same benefits. Smaller business could provide a transport allowance or some other subsidy to staff that will help them to pay for any additional benefits in their private capacity.

Thank you for taking the time to read this blog post. I trust it has been of value to you as a business owner. If you have any comments please feel free to forward these to helen@pplsolutions.co.za or give me a call on 082 716 7597 if you would like to discuss employee benefits further.

Yours in HR,

Helen