What is the UIF?
- A fund established in terms of the Unemployment Insurance Act 63 of 2001.
- It offers short-term financial assistance to employees who are registered with the UIF, contribute monthly to it in terms of the Unemployment Insurance Contributions Act 4 of 2002, and who:
- become unemployed;
- cannot work due to illness, maternity leave or adoption leave; or
- are deceased and have dependents.
Who does the UIF apply to?
- Every employer who pays remuneration to an employee must contribute on a monthly basis to the UIF
- Employees must work more than 24 hours a month.
- Employees can claim if their employers are bankrupt, contracts are completed, or if they are dismissed.
- The UIF applies to domestic workers who work for 1 or more than 1 employer, and who lose their job at one of the employers or their employer dies.
- The UIF does not apply to workers who are:
- foreigners working on contract who will be sent back to their countries at the end of their contract period;
- an employee who only earns commission;
- an employee that receives remuneration under a contract of employment in terms of the Skills Development Act 97 of 1998; or
- employees in the national and provincial spheres of Government who are officers and employees per the Public Service Act, 103 of 1994.
How is an employee registered?
- The employer is responsible to register an employee with the UIF.
- An employer must approach the Department of Labour and complete the necessary forms to ensure registration.
What is the amount of contribution?
- A contribution to the UIF is made monthly.
- Employees pay 1% of their salary and employers contribute another 1%.
- For example: a domestic worker earns R1700 a month. S/he must contribute R17 to the UIF and the employer must contribute another R17 to the UIF.
- It is the employer’s responsibility to deduct 1% from the employee’s salary (R17) and pay it, together with his/her 1% contribution(R17), to the UIF (totaling R34).
- An employee who earns more than R14 872 a month will not contribute more than R148.72 a month.
- There is no tax payable on the contribution or the benefit received.
How much money can be claimed?
- A contribution to the UIF for 4 years or more entitles a claim for up to 238 days (34 weeks). A shorter period entitles an employee to claim 1 day for every 6 days worked.
- Maternity leave allows a claim of only 121 days.
- The UIF pays a percentage of the salary earned. The highest amount that can be paid is 58% of a salary earned per day.
- Employees can claim from the day they stopped working until their benefits are used up or they start working again.
How to claim from the UIF?
- Step 1: an employee must contact the Department of Labour to get the necessary documents depending on the type of claim (LegalWise can assist in this regard). Employees must claim within 6 months after they stop working.
- Step 2: the employee must go to the nearest Labour Centre to hand in the documents. Staff at the Labour Centre will assist an employee with the processes and will give advice.
- Step 3: an employee must follow the instructions of the staff, for example, the staff might request an employee to attend training.
When can the UIF refuse to pay benefits?
- Due to fraud, resignation, the employee accepts another job, s/he does not report at set dates and times or refuses to go for training or accept advice, or if benefits are claimed from the Compensation Fund or an Unemployment Fund under the Labour Relations Act.
What happens if there is a dispute regarding payment of benefits?
- If the Commissioner of the UIF or a claims officer rejects a claim for benefits, an appeal can be lodged with the Regional Appeals Committee by sending the prescribed appeal form to the UIF’s head office.
- If an employee is not satisfied with the Regional Appeals Committee’s decision s/he can appeal to the National Appeals Committee.
- UNEMPLOYED: an employee loses his/her job due to a fair dismissal. A resignation is excluded.
- ILLNESS: the illness results in an employee being off work for more than 2 weeks.
- MATERNITY LEAVE: may be taken from at least 4 weeks before the expected due date and not within least 6 weeks after the delivery of the child.
- ADOPTION LEAVE: where an employee adopts a child less than 2 years old.
- DEPENDENT: a person relying on the support and survival of an employee such as the spouse or minor child/ren of the deceased employee.
- COMMISSION: payment to an agent for selling something.
- DOMESTIC WORKERS: a cleaner of a household; gardener; driver of a motor vehicle for a household; or a person who cares for children, the sick or aged. A farm worker is excluded.
How can My Business Registration help you?
- A consultant can assist employers to register with the UIF.