Must Contractors Register with Workman’s Compensation in South Africa?
The COID Act serves the purpose of providing compensation should disablement be caused by any occupational injuries and diseases, should these be sustained by employees during their employment. This also includes any death resulting from such injuries and diseases and it provides for matters that are therewith connected.
Contractors who employ workers to perform work are considered Employers. For this reason, contractors must register with Workman’s Compensation in South Africa. To further elaborate on this, it is imperative to explore the considerations contained in COIDA.
COIDA Section 80 – ‘Employer’
The meaning of the word ‘employer’ translates to any person, including the State, who employs an employee. This can include:
- Any person who controls the business of an employer.
- When and where the services of an employee are lent, let, or temporarily available to another person by his employer, such employer for such period, as the employee will perform work for that person.
- A labour broker who, against payment, provides a person to a client with the purpose of rendering a service or the performing of work, and for which service of work such a person is paid by the labour broker.
COIDA Section 1 (Chapter 1) – Assessment Fees
Employers are liable to pay assessment fees except for the following:
- National and provincial state departments
- Certain local authorities
- Employers who are insured by a company other than the Compensation Fund like Mutual Associations, which only includes the Federated Employers Mutual Assurance (FEMA) relevant for the building industry, and Rand Mutual Assurance Company (RMA), for the mining industry.
Seven days safter having employed an employee, an employer must register with the Commissioner. The Employer must subsequently register by submitting Form W As 2 which includes the particulars required. All the questions on the form must be completed and copies of the following must accommodate the form:
- The registration certificate that has been issued by the Register of Companies should the employer be a company or a closed corporation, and
- The ID document if the employer is the sole owner of the business.
As soon as this has been completed and submitted, it may take up to 21 working days for the employer to receive a postcard from the Commissioner with the employer’s registration number.
Should the employer employ one or more part- or full-time workers, they are legally obligated to register with the Workman’s Compensation Fund. They are also liable to pay annual assessment fees.
The Compensation Fund is a trust fund which is controlled by the Compensation Commissioner, with employers contributing to the Fund.
COIDA Section 1 (Chapter IX)
Employers are subjected to an annual assessment fee based on the earnings of their employees along with the risks associated with their type of work or provision. All registered employers including contractors must submit their statement of earnings before March 31 every year.
The assessment fee that employers are subjected to is calculated by the total of employees’ pay divided by 100 and multiplied with the assessment tariff. These tariffs are reviewed annually and are based on the risks relating to the work.
Employers form part of one of more than a hundred subclasses and each has its own assessment tariffs. Should an employer’s accident costs rank higher than others in the same subclass, employers can expect that their assessment tariff will subsequently be increased.
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