Wine producers and cellars must be registered with the Department of Employment and Labour’s Compensation Fund to cover their workers against work accidents and declare their earnings annually. Employers must now take note of the recent assessment period announcement by the acting director general of the Department of Employment and Labour, according to Stephan Pietersen of Work Accident Support.
Stephan Pietersen of Work Accident Support.
The announcement
The acting director general of the Department of Employment and Labour, Mr. Viwe Mlenzana, announced on 7 February 2025 that the earnings must be declared from 1 April 2025 to 30 June 2025 for the Compensation Fund to issue the account.
This includes wages that were paid to the workers from 1 March 2024 to 28 February 2025 to a maximum of R597 323 per year. “This means that for any worker who earned more than this amount, for example R700 000, only R597 323 must be declared,” Stephan says. “This applies for any salaries or wages that were paid to all permanent, temporary, contract, and seasonal staff, as well as working directors.”
Employers are also urged to complete and submit the confirmation of employer registration details form when filing their 2024 Return of Earnings (ROE) to assist the Compensation Fund in cleansing and updating employer records.
Once the earnings are declared, the account will be issued immediately and is payable within 30 days, says Stephan. “The company has the option to pay off the account, but this application must be made within 30 days of the account being issued. The bank account and reference number must be used exactly as on the account and do not pay money into any third party account. Once the account is paid, the letter of good standing will be issued.”
Calculations
Producers/vineyards in the wine industry falls under the subclass Tillage and Forestry and will pay a tariff of R2.51 for the 2024 financial year and this will increase to R 2.65 for 2025.
A cellar will pay a tariff of R2.02 for the 2024 financial year, which will decrease to R1.96 for 2025.
These tariffs are multiplied by the earnings the producer and cellar declared to calculate the amount payable to the Compensation Fund.
Producers who are also in the hospitality services industry, i.e., who have a guest house and/or a restaurant and who have a significant number of staff, must investigate whether to register this as a separate entity, as this industry pays a tariff to the Compensation Fund of only R0.79 .
Penalties
Employers should be aware that penalties may be levied as a consequence of not declaring wages.
Firstly, a 10% penalty will be issued for late declaration of earnings. A company can also be charged for non-compliance in terms of the Basic Conditions of Employment Act. “Furthermore, doctors these days also refuse to treat injured workers if a company is not declaring their earnings and if their account is not up to date,” Stephan says.
Mistakes do happen. In that case, the Compensation Fund has to be notified within 60 days if any mistakes were made when declaring the earnings, and the business will have to submit the necessary forms to rectify the account.
Compliance
If the farm or cellar was sold during the period of assessment, an application must be made for the deregistration of the farm/cellar with the Compensation Fund and the earnings must be declared manually and not electronically.
In 2023/2024, there were 941 000 businesses registered with the Compensation Fund, but only 347 000 companies declared their earnings. As outlined above, this could have have serious consequences for companies.
Benefits
According to Stephan, the benefits companies qualify for, in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA), are as follows:
- The Act follows a “no-fault” principle, meaning all cases will be accepted as long as they meet the description of an accident, and the company will not be held responsible for the fact the employee was injured;
- When an employee gets injured, the company must pay the employee’s wage/salary, and this will be refunded by the Compensation Fund;
- The employee will also qualify for a payment if he/she suffered a degree of permanent disability;
- The family of a deceased employee will qualify for compensation.
WATCH
Watch this interview with Stephan Pietersen regarding the declaration of wages on GROOTplaas.
