In terms of the Compensation for Occupational Injuries and Diseases Act, No 130 of 1993 (“the Act”), it is required by any employer carrying on a business in South Africa to register as such with the Compensation Commissioner (“the Commissioner”) for the purposes of occupational injuries and diseases.
This registration is required for each business of the employer separately, but certain types of business are exempt. A business is defined as “any industry, undertaking, trade or occupation or any activity in which any employee is employed”.
Once registered, it is required under this Act that every business must submit annually (usually at the end of March) a Return of Earning labelled the W.AS 8 to the Department of Labour. This return is generated by the Department of Labour and each return is issued with a unique bar code. The return can be submitted by post or electronically via the website of the Department of Labour.
The Department of Labour then uses the information declared on the W.AS8 return to calculate and issue an assessment to the employer. The employer is assessed at a particular rate applicable to that specific business industry. Once the assessment has been issued to the employer, it must be paid before the due date that appears on the assessment.
The information declared as accurate and correct and signed by both the employer and the agent or payroll administrator on this annual return includes the following:
- The total amount of remuneration for each month individually that was paid to employees for the current year, as well as the expected total remuneration for each month individually that will be paid for the following twelve months.
- The average number of employees for each month individually for the current year, as well as the expected average number of employees for each month individually for the next twelve months.
All information relating to earnings and staff costs must be kept for at least four years. It is a criminal offence to misrepresent any of the facts and information declared on the annual return.
Problems that have been experienced by employers recently regarding the above procedures include the following:
- Returns have not been issued or issued on time to employers:
For the last couple of years it has been the experience of some employers and their representatives that the W.AS8 Return of Earning has not been issued to them in time to complete and submit it, or in fact is has not been issued at all.
- Assessments based on the W.AS8 Return of Earnings have not been issued:
Many employers have waited considerable time for their assessments to be issued to them for payment.
- Assessments have been calculated at the incorrect rate for the employer’s industry:
In many instances it was found that incorrect rates for the specific business industry were used to calculate the assessed amount to be paid by employers. In some instances this led to significant variances between the correct amount to be paid and the incorrect amount calculated by the Department of Labour.
- Objections on incorrect assessments are not being processed:
Many employers have raised objections against their incorrect assessments. Some of these objections have not been processed, while the Department of Labour still demands payment of the incorrect assessed amounts.
Auditors and accountants are very capable to assist employers in following the correct procedure to submit their returns, review the assessments for correctness and solve problems relating to the W.AS8 Return of Earnings.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)