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Is a Letter of Good Standing from the Compensation Fund Necessary?
Do you need a Letter of Good Standing from the Compensation Fund (COIDA)?
As a new business owner and subsequent employer, you may be wondering: do you need a Letter of Good Standing from the Compensation Fund (COIDA)?
The short and simple answer is yes. However, it is crucial to look at what a COIDA Letter of Good Standing (LoGS) is, what you need to get one, and how you can go about obtaining a LoGS.
What is a Letter of Good Standing (LoGS)?
A Compensation Fund Letter of Good Standing, simply defined, is an official letter provided to an employer, proving that they are registered with COID and that they are up to date with their payments to COID.
The reason so many tenders and contracts require employers to be in possession of a WCA Letter of Good Standing is attributable to ensuring that employers are accountable. This accountability specifically refers to employees and making sure that employers operate within legal parameters.
Employers who are not registered with COID or who are not in Good Standing with the Compensation Fund, are not covered and neither will their employees qualify for compensation from COID should work-related accidents occur, attracting medical expenses or compensation in the event of permanent, disabling injury, or even death.
If you have any questions, please feel free to speak to one of our Experts
What documents are required to obtain a Letter of Good Standing?
There are certain prerequisites that apply to an employer or a business owner, in obtaining a COIDA Letter of Good Standing along with the correlating legislation. These prerequisites are:
- That the employer or business owner has registered with the Compensation Fund, as per Section 80 of the Compensation of Occupational Injuries and Diseases Act (COIDA). Employers can become subscribers of SafetyWallet and receive the assistance that they need in their COID registration.
- That the employer or business owner is up to date with their Return of Earnings submissions, as per Section 82 of COIDA.
- That the employer or business owner has been assessed, in terms of their payable amount, as per Section 83 of COIDA.
- That the employer or business owner is up to date with their due payments, as per Section 86 of COIDA.
- Should the employer or business owner have an instalment arrangement to pay their assessment fee monthly, they will receive a COIDA Letter of Good Standing monthly.
Steps in Obtaining a LoGS
Step 1: Registration with COID
Register with COID either directly through the Department of Employment and Labour or subscribe to SafetyWallet to obtain the necessary assistance with such a registration.
Documents needed during registration includes:
- A Valid South African ID of the business owner.
- The Company’s registration document.
- COID Registration Form.
- Power of Attorney – necessary should the subscriber wish for SafetyWallet to complete the application on behalf of them, and
- Proof of payment of assessment fees to COID.
Step 2: Submission of employee expenses
The employer or business owner must submit the total estimated wage and salary expenses of all employees for the year. This allows COID to calculate the assessment fee payable.
The fee is calculated as a percentage of the total yearly wage and salary expenses of the employer, which must be submitted annually. Employers who are renewing their registration must ensure that they submit their Return of Earnings.
Step 3: Paying the yearly/monthly fee
Once the Return of Earnings has been submitted, the Department of Employment and Labour will send the employer their Notice of Assessment (NOA) which indicates the assessment fee that must be paid to COID.
After this amount is paid to COID and thus settled, the employer will receive their Compensation Fund Letter of Good Standing, which is valid for a year until they are required to submit their Return of Earnings for the next period.
This ensures that employees are covered with regards to compensation for a year. Where employers cannot pay the fee once-off, there is a monthly instalment payable. However, the employer must pay a 30% deposit and the Letter of Good Standing is valid from one month to the next, depending on the employer’s commitment to paying the monthly instalment.
How can SafetyWallet help Employers and Contractors’ Health and Safety Compliance?
SafetyWallet works to ensure that its subscribers are supported and assisted in all matters relating to health and safety, and through a partnership with MAKROSAFE and OHS Online, subscribers can ensure that they are a part in creating a safer, healthier, and more compliant working environment.
Click on the image below to find a SafetyWallet Solution that suits your business (Branch/Site specific) and get the 21 benefits along with the subscription:
MAKROSAFE have been assisting clients for more than 23 years with WCA Letter of Good Standing and health and safety in the workplace, contact us now to find out how we can assist you.
MAKROSAFE / SAFETYWALLET / MY SAFETY SHOP are all in Partnership.
Comments (7)
Director/CEO no employees doing work alone. Contractors package in process. Arranged public liability insurance and medical cover. Unable to provide letter of good standing as required by dept. Of labour. Alternative iro. Said letter Thank u
2022-09-14 09:08:01Dear V Moodley Thank you for your comment... To assist your company to get the Letter of Good Standing, kindly follow this link and process the approval: https://www.mysafetyshop.co.za/Products/Letter-of-Good-Standing
2022-09-14 14:26:47I want to pay for my letter of good standing in 4 payments. Can i get a good standing for 3 or 4 months validity period?
2023-02-03 04:35:46Dear Philisiwe Thank you for your comment and request... Kindly follow this link to read about The Return of Earnings and Letter of Good Standing Package that we offer to assist clients: https://www.makrosafe.co.za/The-Return-of-earnings-and-Letter-of-Good-Standing-Package
2023-02-03 11:36:14I want to receive certificate
2023-08-01 17:10:15Good Day Given Thank you for your request. The WCA Letter of Good Standing is for companies who have employees... We can assist your company, kindly follow this link and follow the prompts to process: https://www.mysafetyshop.co.za/Products/Letter-of-Good-Standing If you have any questions or need more assistance kindly contact me: basil@safetywallet.co.za
2023-08-03 08:26:49What proof do I need from a contractor company regarding their LOGS besides theit certificate. Especially those that opted to pay month to month and did not received their certificate as yet
2023-09-27 08:43:55Dear Gerhard Thank you for your query via our comments... The LOGS is really the only way to verify that the contractor is in good standing with WCA, it is very seldom that WCA is late with the issuing of the LOGS, the norm is within 24hrs of receiving the correct and full payment as agreed... In a rare and somewhat urgent case the contractor can give you his WCA registration number with a Letter of Power of Attorney to give you permission to verify with WCA within a specified time period...
2023-09-28 08:24:56I would like to apply for a letter of good standing. I ve not worked yet
2022-08-19 19:33:31Good Day Sonwabo Thank you for your request. The WCA Letter of Good Standing is for companies who have employees... We can assist your company, kindly follow this link and follow the prompts to process: https://www.mysafetyshop.co.za/Products/Letter-of-Good-Standing If you have any questions or need more assistance kindly cantact me: basil@safetywallet.co.za
2022-08-22 07:20:28I am the director of my company but the company has no employees as yet. Do we still need LOGs ? Also, should we contract external parties to work on my company's behalf, do we need LOGs or is it more essential to take up public liability cover instead? I am currently performing all business functions. When and if the company employs someone, will we need to submit estimate costs or wait until a year concluded and we have actual costs incurred to complete the annual return on earnings?
2023-08-09 05:01:53Dear Katy Thank you for your query via our comments... If you are the Director of your business and you are doing the work plus you are taking a salary, then you are also deemed an employee, this means you must register with WCA... If you contract your work out, then your contractors must be registered with WCA and must submit their LOGS to you before work commence, if they are individual subcontractors, then they fall under your WCA... This you must declare with your Return of Earnings... You must submit ROE before the year starts, WCA will do the assessment and sent you a statement for payment, you must pay this in full to receive your LOGS... For assistance, kindly follow the links below: New WCA Registration: https://www.mysafetyshop.co.za/Products/New-WCA-Registration Return of Earnings: https://www.mysafetyshop.co.za/Products/Return-of-Earnings Letter of Good Standing: https://www.mysafetyshop.co.za/Products/Letter-of-Good-Standing Please do contact me should you have any questions or need assistance: basil@safetywallet.co.za
2023-08-10 07:55:25I need Coida certificate and letter of good standing
2023-08-19 17:28:00Dear Kay Thank you for your request via our comments... Kindly follow one of the links below: For a new WCA Registration: https://www.mysafetyshop.co.za/Products/New-WCA-Registration Return of Earnings: https://www.mysafetyshop.co.za/Products/Return-of-Earnings Letter of Good Standing: https://www.mysafetyshop.co.za/Products/Letter-of-Good-Standing
2023-08-21 09:22:32