According to the Department of Employment and Labour, businesses that violate the rules of the Unemployment Insurance Fund (UIF) are subject to punishment.
In a statement released on Wednesday, the department said that employers who have not declared employees and who have kept COVID-19 Temporary Employer-Employee Relief Scheme (COVID-19 TERS) funds for themselves rather than paying their employees are the targets of Phase Two of the UIF’s “Follow the Money Project,” which began this month.
UIF Commissioner Teboho Maruping stated during a breakfast meeting with businesses on Tuesday in Mafikeng, North West, that the Fund is putting both an on-the-spot and an overtime recoupment process in place.
According to the Commissioner, the previous procedure would be followed in cases where firms did not declare personnel prior to March 2020.
In such cases, he stated, 70% of the 2% contribution made by the Fund will be instantly reimbursed.
Only 30% of the costs in these situations will be recovered from employers over time.
“Fifty percent will be quickly recovered by our teams in cases where funds were claimed from the UIF but did not reach the designated employees,” Commissioner Maruping promised employers.
Phase 2 of UIF’s “Follow the Money Project,” which has now recovered nearly R900 million, includes this project.
The UIF hired six audit businesses for the project to track all COVID-19 TERS funds and make sure the right amount was paid to the employees on schedule.
Maruping stated that a team from the Fund is now visiting employers to perform an internal verification of the declared employees, supporting the six auditing companies.
“We are looking into every company that received COVID-19 TERS, but right now we are concentrating on the ones that the Auditor General of South Africa has been looking into.
We will then visit all the other businesses that the UIF compensated after that.
“We are examining the information you declared with us,” he added.
“The number of employees and figures that an employer has declared with the Fund is what we will look at.” He was speaking about the “Follow The Money Project.”
Maruping further stressed the significance of abiding by the Fund’s rules.
According to Maruping, “Employers must register and disclose their employees to the Fund and pay monthly contributions under Section 56 of the Unemployment Insurance Act (UIA) and Chapter 2 of the Unemployment Insurance Contributions Act (UICA).
Siphamandla Gumede, UIF’s Deputy Director of Compliance, urged employers to uphold the legislation and cautioned businesses about the legal repercussions of failing to do so.