UNEMPLOYMENT INSURANCE CONTRIBUTIONS BILL
6. Employer to deduct employee’s contribution
7. Payment of contribution to Commissioner and refund
8. Payment of contribution to Unemployment Insurance Fund and refund
9. Duty to provide particulars
10. Distribution of contribution paid to Commissioner
11. Interest on late payments
12. Penalties on default
13. Application of Income Tax Act
14. Labour inspectors
CHAPTER 3
GENERAL
15. Proof of accuracy of statement
16. Collection costs
17. Offences
18. Regulations
19. Short title and commencement
CHAPTER 1
DEFINITIONS, ADMINISTRATION AND APPLICATION
1. Definitions
In this Act, unless the context otherwise indicates-
'Commissioner' means the Commissioner for the South African Revenue Service established by section 2 of the South African Revenue Service Act, 1997 (Act No.34 of 1997);
'Director-General' means the Director-General of the Department of Labour;
'employee' includes an employee as defined in the Fourth Schedule to the Income Tax Act, other than a person contemplated in paragraphs (c) or (d) of that definition;
'employer' includes an employer as defined in the Fourth Schedule to the Income Tax Act;
'financial year' means the period commencing on the first day of April in any year and ending on the last day of March in the following year;
'Income Tax Act' means the Income Tax Act, 1962 (Act No.58 of 1962);
'labour inspector' means an inspector appointed in terms of section 63 of the Basic Conditions of Employment Act, 1997 (Act 75 of 1997), and includes any person designated by the Minister in terms of that section to perform any function of a labour inspector;
'Minister' means the Minister of Labour;
'remuneration' means remuneration as defined in the Fourth Schedule to the Income Tax Act, including any amount contemplated in paragraph (vii) of the exclusions to that definition but excluding any amount paid or payable to an employee
(a) by way of any pension, superannuation allowance or retiring allowance:
(b) which constitutes an amount contemplated in paragraphs (a), (d), (e), (eA) or (f) of the definition of "gross income" in section l of the Income Tax Act;
(c) by way of commission or as a dividend: or
(d) where such amount is based on the quantity or output of work done, unless the amount is part of the employee's minimum compensation in terms of any law, collective agreement or contract of employment:
'this Act' includes any regulations made in terms of this Act:
'Unemployment Insurance Act' means the Unemployment Insurance Act, 2000 (Act No. ... of 2000);
'Unemployment Insurance Commissioner' means the Commissioner designated by the Minister in terms of section 44 of the Unemployment Insurance Act; and
'Unemployment Insurance Fund' means the Fund established in terms of section 54 of the Unemployment Insurance Act.
2. Purpose of Act
The purpose of this Act is to provide for the payment of contributions for the benefit of the Unemployment Insurance Fund, and to provide for procedures for the collection of such contributions.
3. Administration of Act
(1) The Act must be administered by the Commissioner.
(2) The Commissioner may assign any function required to be performed in terms of this Act to the Unemployment Insurance Commissioner, in so far as it relates to the collection of the contributions payable to the Unemployment Insurance Commissioner in terms of section 8.
4. Application of Act
This Act applies to all employers and employees, other than-
(a) employees employed for less than twenty four (24) hours a month with that employer;
(b) employees who are entitled to remuneration in terms of a learnership agreement registered in terms of the Skills Development Act, 1998(Act 97 of 1998);
(c) public service employers in the national, provincial and local spheres of government and its employees; or
(d) domestic workers and their employers: provided that there shall be an investigation undertaken by an appropriate body, appointed by the Minister. to investigate methods and make recommendations to the Minister, in regard to including domestic workers under coverage of this Act, and this investigation may be concluded within eighteen months from the date of promulgation of this Act.
CHAPTER 2
DUTY TO CONTRIBUTE AND RECOVERY OF CONTRIBUTIONS
5. Duty to contribute to Fund
(1) Every employer and every employee must contribute to the Unemployment Insurance Fund.
(2) Every employer shall be liable for the payment of the contributions on a monthly basis for the benefit of such Fund, in respect of each of its employees.
(3) For the purposes of subsection (2), the amount payable by an employer in respect of any month, relating to each of its employees, shall be-
(a) in respect of the contribution by the employee, one per cent of the employee's remuneration paid or payable by the employer to the employee during such month; and
(b) in respect of the contribution by such employer, an amount equal to the sum of the employee's contribution.
6. Employer to deduct employee's contribution
(1) Subject to subsection (2) an employer must deduct or withhold the amount of the employees contribution contemplated in section 5(3)(a), in respect of any month, from the remuneration paid or payable to that employee for that month.
(2) Where the remuneration of the employee is paid at intervals other than on a monthly basis, the employer must deduct the amount of the employee's contributions on such other basis as coincides with the intervals of payment of remuneration by the employer to the employee.
(3) When making a deduction in terms of subsection (I) or (2) an employer may not
(a) deduct amounts that are in excess of the amount of the contribution due by the employee:
(b) seek or receive a fee from the employee for complying with the provisions of the Act; or
(c) deduct arrear contributions from the employee.
(4) Where the employer fails to deduct the contribution of the employee as contemplated in subsection (I) or (2) the employer shall be liable for such contributions.
(5) If any payment made by the employer in terms of section 7 or 8 included an amount which was deducted or withheld in terms of subsection (I) or (2), and it subsequently becomes known that the payment made by the employer was not due or payable in terms of the Act, or was in excess of the amount due or payable, the employer shall refund to the employee so much of the amount deducted or withheld as has been overpaid by the employer, notwithstanding the fact that such amount may not have been refunded to the employer by the Commissioner or the Unemployment Insurance Commissioner, as the case may be.
7. Payment of contribution to Commissioner and refund
(1) Subject to section 8, every employer must pay the amount determined in accordance with section 5(3) in respect of all its employees, to the Commissioner not later than seven days, or such longer period as the Commissioner may determine, after the end of each month in respect of which the contributions are payable.
(2) An employer must, together with the payment contemplated in subsection (I), submit a statement
(a) in the form as the Commissioner may require; and
(b) reflecting the amount of the payment and such other particulars as the Commissioner may require.
(3) If the amount of any contribution, interest or penalty paid by an employer to the Commissioner was not due or payable, or was in excess of the amount due or payable in terms of this Act, so much of such amount which was not due or payable, or such excess, must be refunded to that employer by the Commissioner, which refund is a drawback against the National Revenue Fund.
(4) The Commissioner must, before the twenty first day of each month, notify the Director-General of the amount of the contributions, interest and penalties collected from and refunds made to. employers during the previous month and provide such further particulars as may be required by the Director-General.
8. Payment of contribution to Unemployment Insurance Fund and refund
(1) Where an employer is not required to register for employees' tax purposes in terms of paragraph I 5 of the Fourth Schedule to the Income Tax Act, such employer must pay the amount determined in accordance with section 5(3) in respect of all its employees, to the Unemployment Insurance Commissioner.
(2) Subject to subsection 6, an employer contemplated in subsection (1), must pay the amount to the Unemployment Insurance Commissioner not later than seven days, or such longer period as the Unemployment Insurance Commissioner may determine, after the end of each month in respect of which the contributions are payable.
(3) An employer must, together with the payment contemplated in subsection (2) or subsection 6, submit a statement
(a) in such form as the Unemployment Insurance Commissioner may require; and
(b) reflecting the amount of the payment and such other particulars as the Unemployment Insurance Commissioner may require.
(4) The Unemployment Insurance Commissioner must pay all contributions, interest and penalties collected into the Unemployment Insurance Fund.
(5) If the amount of any contribution, interest or penalty paid by an employer to the Unemployment Insurance Commissioner was not due or payable, or was in excess of the amount due or payable in terms of this Act, so much of such amount which was not due or payable, or such excess, must be refunded to that employer by the Unemployment Commissioner from the Unemployment Insurance Fund.
(6) Where the employer on reasonable grounds believes that the total amount payable in terms of section 5(3) in respect of all its employees during any financial year will not exceed R2 500, or such other amount as the Unemployment Insurance Commissioner may from time to time determine. The employer may elect to make payment of the full amount of the total contributions in respect of such financial year in a single payment at the beginning of the year.
9. Duty to provide particulars
(1) When an employer becomes liable for the first time to contribute to the Unemployment Insurance Fund in terms of this Act, such employer must, within 7 days after the employer becomes so liable, and thereafter on the first day of each financial year that the employer remains so liable furnish such information relating to its employees to the Commissioner or the Unemployment Insurance Commissioner, as the case may be, as may be determined by the Commissioner or Unemployment Commissioner respectively.
(2) The information contemplated in subsection (1) may include
(a) particulars relating to the physical location or locations where the employer and its employees are located;
(b) if the employer is not resident in the Republic, or is a corporate entity not registered in the Republic, the particulars of the authorised person who is required to carry out the duties of the employer in terms of this Act; and
(c) the names, identification numbers and monthly remuneration of each of its employees.
(3) The employer must, before the seventh day of each month, inform the Commissioner or the Unemployment Commissioner, as the case may be, of any change during the previous month of any information or particulars furnished in terms of subsection (I).
(4) The Commissioner or the Unemployment Insurance Commissioner, as the case may be, may request the employer to provide within 30 days of the request, or such extended period as the Commissioner or Unemployment Insurance Commissioner may allow, such additional particulars as may be reasonably required to give effect to the purpose of this Act.
10. Payment of contributions collected by Commissioner in National Revenue Fund and allocation
(I) The contributions, interest and penalties collected by the Commissioner, after deduction of refunds, must be paid into the National Revenue Fund.
(2) The total amount of contributions, interest and penalties paid into the National Revenue Fund in terms of subsection (1), is a direct charge against the National Revenue fund for the credit of the Unemployment Insurance Fund.
(3) The Director-General must, within 7 days after receipt of the notice from the Commissioner in terms of section 7(4) allocate the amount of the contributions, interest and penalties paid into the National Revenue Fund, to the Unemployment Insurance Fund. (these amounts are not paid into the NRF in the first instance).
11. Interest on late payments
If an employer fails to pay the full amount payable in terms of section 7 or 8 on the last day for payment as contemplated in section 7(1) or 8(2), interest is payable on the outstanding amount at the rate contemplated in paragraph (1) of the definition of "prescribed rate" in section 1 of the Income Tax Act, calculated from the last day for payment to the day that payment is received by the Commissioner or Unemployment Commissioner, as the case may be.
12. Penalties on default
(I) Subject to subsection (3), if any contribution remains unpaid after the last day for payment thereof as contemplated in section 7(1) or 8(2), a penalty of 10 per cent of that unpaid amount is payable in addition to the interest contemplated in section II.
(2) Where an employer fails to pay any amount payable in terms of this Act or pays an amount which is less than the amount so payable which has the effect that any one of its employees will not be entitled to a benefit under the Unemployment Insurance Act or will be entitled to benefit that is less than the benefit to which such employee would have been entitled had the full amount payable in accordance with the provisions of the Act been paid by the employer, such employer shall be liable for-
(a) a penalty of two hundred percent of the unpaid including any interest that may be payable.
(b) payment of an amount equal to the difference between the amount to which the employee would have been entitled, had the full amount been paid by the employer, and the amount, if any, to which the employee is actually entitled as a result of the non- or underpayment.
(3) The Commissioner or the Unemployment Insurance Commissioner, as the case may be, may, having due regard to the circumstances of the case, remit the penalty or any portion thereof imposed by subsection (I).
13. Applicability of Income Tax Act
The provisions of the Income Tax Act relating to-
(a) the administration thereof as contained in Chapter 1 of the Income Tax Act;
(b) returns, the production of information, documents or things, enquiries, searches and seizures and evidence on oath;
(c) assessments;
(d) objections and appeals;
(e) the payment and recovery of tax, interest and penalties;
(f) refunds;
(g) representative taxpayers;
(h) transactions, operations or schemes for purposes of avoiding or postponing liability for taxes on income or reducing the amount of taxes on income; and
(i) reporting of unprofessional conduct, apply, with the changes required by the context, to the contributions paid or payable in terms of this Act, in respect of-
(i) the administration of this Act;
(ii) statements, the production of information, documents or things, enquiries, searches and seizures and evidence on oath for the purpose of obtaining full information in respect of the calculation of the contributions due and payable in terms of this Act;
(iii) any assessment, objection and appeal and the payment, recovery or refund of the contribution, interest or penalty;
(iv) representative taxpayer;
(v) any transaction, operation or scheme entered into or carried out for the purposes of avoiding or postponing liability for the contribution or reducing the amount of the contribution and in the application of the provisions contemplated in paragraph (h) such provisions are regarded to include a reference to the contribution.
(vi) reporting of unprofessional conduct.
14. Labour inspectors
The Commissioner or Unemployment Insurance Commissioner may request a labour inspector to assist in the investigation of any employer who is required to pay the contributions to the Unemployment Insurance Commissioner in terms of section 8.
CHAPTER 3
GENERAL
15. Proof of accuracy of statement
In any proceedings in terms of this Act, it is for an employer to prove that the information supplied by it is accurate.
16. Collection costs
(I) Subject to subsection (2), the Director-General must, on a monthly basis as may be agreed between by the Commissioner and the Director-General, defray the costs of collection by the Commissioner from the Unemployment Insurance Fund.
(2) The total amount of collection costs referred to in subsection (I), excluding the start-up capital costs which will be defrayed from the budget vote of the Department of Labour, may not exceed two per cent of the total amount of the contributions collected.
17. Offences
Any person who
(a) fails to pay any amount due in terms of this Act on the day determined for payment thereof;
(b) fails to-
(i) submit or deliver any statement or other document or thing;
(ii) disclose any information:
(iii) reply to or answer truly and fully any question put to him or her;
(iv) attend and give evidence,
as required in terms of this Act; or
(c) hinders or obstructs any person in carrying out his or her functions in terms of this Act,
commits an offence and is liable on conviction to a fine or imprisonment for a period not exceeding two years.
18. Regulations
The Minister may, in consultation with the Minister of Finance and the Commissioner and after consultation with the Unemployment Insurance Board established in terms of section 36 of the Unemployment Insurance Act, make regulations about any matter which
(a) may or must be prescribed in terms of this Act; and
(b) is necessary for the effective administration of this Act.
19. Short title and commencement
This Act is called the Unemployment Insurance Contributions Act, 2000, and takes effect on a date to be determined by the President by proclamation in the Gazette.