HR 101 - What to do When . . . You are not sure about Workmen's Compensation - Part 2

HR 101 - WHAT TO DO WHEN . . . You Are Not Sure About Workmen’s Compensation? – Part 2

By Nikki Viljoen – N Viljoen Consulting CC.

Please note that this pertains to South African Labour Relations and Best Practice requirements.

So now you have registered and as required you need to send in your ‘Return of Earnings’ – what on earth is that.

You see, unlike most of the other ‘insurance’ legislated requirements, Workman’s Compensation is calculated and paid for on an Annual Basis and based on the Annual Salaries paid.  Let’s have a look at the requirements.

When are employers required to submit their return of earnings?

The W.AS 8 is the form that deals with the Return of Earnings, and this must be completed and submitted by no later than 31st March each year.  Once again the form can be downloaded from the Department of Labour site at http://www.labour.gov.za or from me (mail me on nikki@viljoenconsulting.co.za).

The return has to include, but not be limited to the following information:

- The amount of earnings paid by the employer to their employees, during the period from the 1st day of March the preceding year, up to and including the last day of February the following year.  In other words it works exactly along the same dates as the tax year.  For example on the 31st March 2009, the amount of earnings paid by the employer during the period 1st March 2008 to 28th February 2009. 

- Should the employer have opened the business between these date an ‘estimate’ needs to be submitted.

- In all instances the Accountant must sign off to indicate the correctness of the information.

- Should the employer have more than one business or more than one premises, the Commission may require the employer to issue separate returns for each place or type of business.

- Any other information required by the Commission.

The amount that is required to be paid is based on an Assessment fee.

What is an Assessment?

The salary bill, together with the Assessment tariff will produce the Annual Assessment fee.

Let me back it up for a moment.

Logic will tell you that someone who works in an office, quietly without having to drive around or be exposed to dangerous chemicals etc will have far less chance of getting hurt at work than say someone who drives a Construction Crane or who works at a Chemical Factory.  So there are different tariffs for different jobs and they are based on the risks associated with the type of work that is being done.

The Assessment fee is calculated by the following formula.

Assessment fee = total workers’ pay, divided by 100 multiplied by the assessment tariff.

Logic must also tell you that there are many individual types of jobs that are exempt from being assessed as they carry very little if any kind of risk.

Who is exempt from being assessed?

In terms of the Act, the following institutions are not required to be assessed.  These are, but not limited to:
“
• National and provincial spheres of government, including parliament;
• A local authority who has obtained a certificate of exemption from the Workmen’s Compensation Act;
• A Municipality that has received an exemption;
• An employer who has, with the approval of the Director General, obtained from a mutual association a policy of insurance for the full extent of his potential liability in terms of the Act for all employees employed by him.”

Well I say that is pretty clear – so if you employ anyone, including yourself, and you wish to become exempt – you have to apply and receive a certificate evidencing the exemption.  Exemption is not automatic.

Next week we will have a look at when the Commissioner varies the tariff of assessments, when the employer must pay and ‘how to’ pay.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za