What is the Ins and Outs of Occupation Injuries

To cover your workers against occupational diseases, injuries, and death, you must register with the Compensation Fund.

The Fund covers an Employee who is:

• Permanently employed
• A domestic worker in a boarding house
• An apprentice or trainee farm worker and
• A worker paid by a labour agency.

Workmen’s Compensation is a compulsory form of insurance providing compensation in the case of disablement caused by occupational injuries and diseases, sustained, or contracted by employees in the course of their employment, or death resulting from such injuries and diseases.

Employers are required to register with the Compensation Fund and can face fines if they do not submit a Return of Earnings (RoE) on an annual basis to the Compensation Fund, in order to obtain a Letter of Good Standing. However, there’s a yearly fee connected to this fund.

What is a Letter of Good Standing?

A Letter of Good Standing proves that you are in good standing with COID, with no outstanding annual payments, and ultimately proves that COID will assist in paying for any work-related injuries or harm to your employees. A Letter of Good Standing is required when applying for most tenders and contracts.

What is a Return on Earnings (RoE)?

The Compensation for Occupational Injuries and Diseases (COID) Act requires all employers to submit a declaration, known as a Return of Earnings (ROE), of annual earnings (including benefits) paid during the period under review to the Compensation Fund each year. This amount, combined with the nature of business, will determine the amount payable by the employer to the Compensation Fund.

Once the ROE is submitted, employers are issued with a Notice of Assessment / Invoice, indicating the amount payable to the Compensation Commissioner, which must be paid within 30 days to avoid penalties and interest.

When must the RoE be Submitted?

Employers are required to submit a Return of Earnings (ROE) on an annual basis as soon as the ROE Online System platform opens between 1 April and 31 May.
What is the Earnings Threshold?
An annual earnings threshold is the maximum amount of an employee’s earnings that the OID contribution can be calculated on (currently R484,200.00 per annum per employee). The simplest way to explain this is to divide the annual threshold of R484,200.00 into a monthly threshold of R40,350.00 per month (484,200 ˜12)

What is the Assessment Tariff?

The assessment tariff is determined according to hundreds of industry classifications, classes, and subclasses which are based upon the risks associated with the type of work performed. The Commissioner will issue an assessment based on the earnings declared and the tariff applicable to the Industry in which the company operates.

Employers will be required to declare the actual earnings paid and to estimate their employee/s earnings for the following year.

Notes:

• Overtime is only subject to OID if an employee regularly gets paid overtime.
• If the nature of business is incorrectly classified, it may result in higher assessment rates being payable.
• The Compensation Fund uses the opening date when referring to the year of submission i.e. the 2020 submission refers to the Return on Earnings for the period March 2020 to February 2021. This can be confusing, since the tax year makes use of the end date i.e. the 2020 tax year refers to the period March 2019 to February 2020.

News Flash:

Newly confirmed labour rules require all South Africans who employ domestic workers to register with the Compensation Fund (COID) and make annual payments to cover their employees. Unless the department’s director general revises the assessment date, employers of domestic workers will likely have until March 2022 to comply with the ROE protocol.