In a brand-new monthly feature, Stephan Pietersen from Work Accident Support answers some of the most pressing farmers’ questions. This month, he discusses the occupational injuries and diseases act and has handy tips on dealing with the Compensation Fund. Based in Pretoria, Work Accident Support helps with the consultation and administration of work-related accidents and injuries across Mzansi.
Congratulations. You’re a farmer who employs workers. In a country with mass unemployment, that is a huge achievement. However, it is not enough to merely pay them at least the minimum wage. You have a legal obligation towards protecting your employees, and you have to understand the nuances of the Compensation Fund.
Remember, this applies to both full-time and seasonal workers. Should an injury occur, and you as the employer are found to be negligent, there could be serious repercussions and even imprisonment.
What is the compensation for the occupational injuries and diseases act?
Let’s assume Thabo from Soweto bought a piece of land and he wants to start farming. Obviously, he will be needing help and so he decided to appoint a couple of workers. Within seven days, he must register his farm as a business with the department of labour’s compensation fund to cover his workers against work accidents. These workers may also include seasonal workers.
For the purposes of this act, the agriculture sector has four categories:
- sugar and tea farming;
- mixed farming;
- livestock farming; and
- tillage and forestry.
These categories are associated with a specific tariff and this is used to calculate the account payable to the Compensation Fund by the farmer.
Once the company is registered, what will be the next step?
Once the registration is done, Thabo must declare what he thinks the wages will be he is going to pay his workers from the date of registration until February the following year. This will allow the compensation fund to calculate the amount he must pay to cover his workers. The Compensation Fund’s financial year ends in February.
Let’s make an example of the calculation. Let’s say Thabo is a livestock farmer who declares wages of R500 000 for the year. The rate for this particular category is R2.15 for every R100 that Thabo pays out in wages to his workers.
The fund will take the wages (R500 000) x by rate (R2.15) divided by 100. So, the amount payable by Thabo is R10 750 for the year which can be substantial. This amount is payable within 30 days.
But what if Thabo cannot afford to pay this amount as he is only starting his business?
There is an option for him to apply from the Compensation Fund to pay this amount in installments, but it remains very important that he must apply within 30 days of this account being issued.
He paid this amount. Anything else Thabo should know about?
Once the account is paid up, it means Thabo’s company is now in good standing. A letter of good standing will be issued, and this can be provided to a labour inspector if he gets a visit from them, or he can use it if he ever wants to apply for a business loan to expand his farming business. These steps to declare his wages must be followed annually.
It is very important to note that the due date for the declaration of wages is 31 May 2021. Failure to do this will result in a penalty of 10% on the assessment being issued for the late declaration. Plus, an additional penalty of 10% if the account is to be paid late.
What topic will we focus on next here on Food For Mzansi?
We will have a look at the kind of benefits farmers enjoy once they are registered with the Compensation Fund.
- Need help with employer injury on duty claims management? For more information, call 064 360 2638 or email email@example.com. You can also visit www.workaccident.co.za.