Some companies have allegedly failed to pay workers their Unemployment Insurance Fund (UIF) temporary employer/employee relief scheme (TERS) payments, according to Employment and Labour Minister Thulas Nxesi.
In a statement on Monday, Nxesi said auditors appointed last week have already uncovered instances where some employers are “seeking to enrich themselves.”
He explained, “It is alleged that there are companies that have not paid the workers what is due to them. We are aware of some companies allegedly loaning employees the money and that is not legal.
“We are also aware of other companies that are allegedly paying part of the money and not the full amount, as well as companies using the money for something else other than the intended purpose. If all these allegations are true, we appeal to companies to do the right thing still.”
R21b paid since April
Nxesi said the UIF has paid R21 billion to 3,609,161 workers, who are represented by 314,454 employers, since April. UIF TERS May payments amounted to R3.2 billion and benefitted more than 782,000 workers.
However, R3.2 billion from the first round of payments, which is supposed to benefit 725,791 workers, “remains in abeyance” because the Fund is awaiting more details from employers. In addition, more than 85,000 workers did not benefit from May UIF payments because of missing details.
Nxesi appealed to employers to submit these details “so that the Fund can help those who need the money or for whom this may be the only source of funds.”
He further appealed to companies to ensure they are UIF compliant, adding that the Fund had made payments to some non-compliant companies because it did not want to disadvantage workers.
He said, “There are many cases where companies have not declared workers or have not contributed for employees. We will be raising debt against those companies and they must know that they need to pay back with interest and other penalties owed to the UIF.
“It is in all our interest to do the right thing. Even without being compliant, we have done the right thing and still paid them the relief and they also have to do the right thing.”
Payments to employees’ bank accounts
In May, UIF Commissioner Teboho Maruping said the Fund had installed an “enhanced system” that will allow employers to retrieve their April applications, make necessary corrections on those rejected applications, and re-submit them.
In case the information has not changed, the enhanced system will process it “immediately” on confirmation by the employer, the Fund added. If not, the employer will need to update the information.
Maruping added, “The NEDLAC partners have given UIF a mandate to pay directly into the employees’ bank accounts in order to avoid delays and to deal with complaints where employers were alleged to be withholding the money or underpaying employees.”
The UIF said the option to transfer funds to employers, bargaining councils or associations is still available, but urged employers to opt for payment into employees’ accounts for faster processing.