Author: Lavine Haripersad, Vice Chair, South African Payroll Association (SAPA)
 
The year is rushing to an end and many South Africans are looking forward to a well-deserved break. It has been a difficult year for most companies with the unprecedented negative economic and political climate.  Companies are battling to be profitable. 
 
It is also a time of year where many employees have an expectation of receiving some reward in the form of an annual bonus. A bonus is different from a 13th cheque, as the payment of annual bonuses is not guaranteed. The employer can decide whether he wants or is able to reward his employees by paying a bonus. If it has never been the practice there is no fear that the business falls foul of the labour laws.
 
If the company has a policy of paying a guaranteed 13th cheque which is stipulated in the employee’s employment contract, it will be a transgression of the labour laws if the payments are not made.  And, if the company habitually pays out bonuses, but this year they cannot afford to do so, it has to inform its employees well in advance that it is deviating from its normal practice.
 
Ideally employees would be informed at least six months before the time that there will be no bonuses to ensure there are no expectations of getting one. People tend to over-commit themselves if they have an expectation of getting a bonus at the end of the year. Many spend the bonus long before they receive it and this can cause hardship or even greater indebtedness.
 
Performance-linked bonus
Many companies have also established a policy of “performance linked bonuses” where performance targets are set at the start of a financial year. Specific performance targets are set for individual employees, mainly those who are in senior management positions who have a direct influence in the way the company is run and perform.
 
The bonus is normally calculated as a percentage of the employee’s remuneration and the company should have a clear policy in place, which sets out the criteria that have to be met in order for the bonuses to be paid out.
 
In most instances there will be a component of business performance targets to be achieved for the company. It is quite likely that the business may have performed well, but certain individuals were unable to meet their individual performance targets, or the other way around.
 
The policy must be clear about how the bonuses will be calculated and this must be completely transparent.
 
Impact of no bonus
Despite receiving forewarning that annual bonuses will not be paid out, it certainly is demotivating. As this potentially affects productivity, it would benefit a company greatly if it is open and transparent about its financial situation and future prospects of re-introducing bonuses.
 
Furthermore, companies can find other, less expensive ways of motivating its employees if they are unable to afford bonuses. These include days off for years worked or rewarding overtime with days off. It may even include a wellness day at the office or allowing for flexible working hours in certain circumstances.
 
The fortunate ones
Employees who are in the fortunate position of receiving a bonus should be cautious not to spend it all on holidays or gifts, but rather to use it wisely to reduce debt, for instance.
 
Many companies have a policy of a 13th cheque that is paid at the end of the year.  This payment is guaranteed if it forms part of the company’s total cost to company. The employment contract will stipulate whether the employee gets a guaranteed 13th cheque, or a bonus that depends on individual performance or the performance of the company.
 
Employees must ensure that this is clearly stipulated in their employment contracts. If there is no mention of a 13th cheque, the employer is not obliged to pay it.  However, if it is clearly stipulated in the contracts, and the company does not honour this agreement with its employees, it amounts to unfair labour practice.
 
Even in tough times it is expected that the company makes provision for the payment of the 13th cheque. Companies are committed to this payment in the same way they are committed to paying salaries.
 
ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za  
 
For more information on SAPA please visit:
Website: http://www.sapayroll.co.za/
Twitter: @SAPayroll
LinkedIn: The South African Payroll Association

Companies in South Africa must meet their legal obligation to ensure that their employees are paid fairly, or prepare themselves for the consequences. This is the advice offered by Arlene Leggat, a Director at the South African Payroll Association (SAPA). “Specifically, they must have a documented system for determining the value of an employee’s job and it must be applied consistently across their workforce,” she urges.

Unfair discrimination and pay
As per the Constitution of South Africa, the Employment Equity Act 55 of 1998 as amended prohibits any person from unfairly discriminating, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language or birth.
 
According to Leggat, “Although the legislation covers a broad range of issues, such as recruitment practices or career development, pay is a core concern because it’s why people work in the first place. Discrimination in this basic area means they’re being unjustly deprived of a better way of life.”
 
Employers are obliged under the Act to eliminate unfair discrimination in respect of pay. They must also ensure that differences in terms and conditions of employment between their employees who are performing work that is the ‘same, substantially the same or of equal value’, do not arise because of the above factors. However, where those factors are considered in terms of an affirmative action programme, it is not unfair discrimination.

Auditing inequality
The Code of Good Practice on Equal Pay/Remuneration for Work of Equal Value (Government Gazette No. 38837 of 2015) sets out practical guidelines for employers to audit their pay policies on an annual basis to identify inequalities.
 
Using this companion to the Act, they must determine which jobs should be audited and if:
a) jobs being compared are the same, substantially the same or of equal value;
b) if there are differences in the terms and conditions of employment regarding pay for these jobs; and
c) if these differences are non-discriminatory and can be justified.
 
When evaluating jobs, employers should consider the responsibilities demanded of the work; the skills, qualifications (including prior learning) and experience required; the physical, mental and emotional effort needed; and the working conditions of the job. They should also take special precautions not to evaluate female-dominated jobs using the same criteria as male-dominated jobs.
 
However, the law doesn’t demand that all employees doing similar work should be paid the same. Certain factors must be considered, like seniority, above-average capability, personal performance (provided the same evaluations are applied  equally), freezing an employee’s pay after demotion until it aligns with fellow workers, shortage of a particular skill, or any other non-discriminatory factor.
 
Employers should familiarise themselves with the Act and the Code of Good Practice to ensure that they satisfy all requirements. “Although they’ll receive ample opportunity to get their houses in order,” warns Leggat, “non-compliance will eventually amount to legal woes which are better avoided.”
 
ENDS
 
MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za 
 
For more information on SAPA please visit:
Website: http://www.sapayroll.co.za/
Twitter: @SAPayroll
LinkedIn: The South African Payroll Association

Most organisations’ biggest and most important expense is its payroll, and no business can risk this resting in the wrong hands, especially when budgets are tight and employees are under pressure.
 
A well-run payroll is the lifeblood of the organisation, as are the qualities of professional support and integrity that underpin the role itself. Ethics and a strong moral code are mandatory qualities for anyone entering the payroll profession, but how are these guaranteed and what happens when they need to be enforced?
 
“The organisation needs to know that the right person with the right ethics is sitting in the payroll hot seat,” says Cathie Webb, Director, South African Payroll Association (SAPA). “They need to know that the person handling their employee pay is dotting the I’s and crossing the T’s and not letting things slip through the proverbial cracks.”
 
Unfortunately, not all payroll practitioners are created equal and what some see as a non-negotiable ethical stance, others see rules that can be bent.
 
A professional stance
“For most professional payroll practitioners, the qualities of integrity, trustworthiness, competence and reliability uphold their own code of behaviour,” says Webb. “However, for the organisation to ensure that these are qualities ascribed to by their payroll practitioner, they need reassurance in the form of a professional body.”
 
A professional organisation is key to establishing a national code of ethics that is adhered to by members and respected by business and other organisations. Practitioners that commit to membership are more likely to follow the code outlined by the institution and will be more inclined to remain in line with the behaviour of their peers.
 
“Once you have signed on the line, you are more aware of the rules, and the consequences of not sticking to them,” adds Webb. “It makes you more careful in how you practice your role. A good reputation is everything - you don’t want things to slip through and for your reputation to become damaged in the process.”
 
Take a stand
A professional membership provides the organisation with the wherewithal to confront fraud or bad practice. It ensures that any practitioner engaging in fraudulent activities is exposed to peers and other organisations. Unfortunately, many organisations don’t take a stand when it comes to their own experiences of poor payroll practice.
 
“We have noticed that when a business asks for assistance in auditing their payroll matters,  as they’ve suspected something isn’t right, if the payroll practitioner is found guilty, 99% of companies don’t bother to take it further legally,” says Webb. “They cite cost and time, but it can be that they are embarrassed that they didn’t follow procedure.”
 
Access to a professional organisation such as SAPA will allow for the organisation to reveal poor practice and prevent it from happening to someone else. They need only report them to the board with proof in order for the practitioner’s membership to be revoked. This level of involvement by organisations will go a long way towards ensuring that ethics remain top of line and mind.
 
“Corruption is rife and companies must be careful,” concludes Webb. “Ensure your payroll practitioner is a member of the professional body (renewable annually), check their reputation with SAPA, and encourage them to become a member if they are not already. Put the right structures in place to mitigate fraud and limit temptation – and a good payroll practitioner can help you do that.”
 
ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za  
 
For more information on SAPA please visit:
Website: http://www.sapayroll.co.za/
Twitter: @SAPayroll
LinkedIn: The South African Payroll Associatio

South Africa is beginning to follow the international trend whereby companies are treating employees like they would their customers.  In part, this is done by providing on-time and detailed payslips designed to boost employee satisfaction and increase the efficiency of query resolution.
 
For a business, there is no greater asset than its employees and keeping them happy and motivated results in employees being more engaged, productive and committed to the company.
 
“One of the most important things that every employee wants is a clear understanding of their payslip and their contributions and deductions,” says Lavine Haripersad, Vice Chair, South African Payroll Association (SAPA). “If they understand every line, deduction and number, then they are immediately more positive and engaged.  Unfortunately, the opposite is true when they are confused or bogged down in baffling details.”
 
She adds that employees can easily become distracted and discouraged if they are paid incorrectly or not on time. However, if this issue is out of the equation, their focus falls back on their jobs, which automatically improves performance.
 
Ensuring Trust
A cultural shift is taking place across companies towards high-performance and high value-driven employees. Within this arena, payroll plays a significant role in ensuring employees’ trust in the organisation’s ability to provide them with financial stability and in taking the pressure off management who don’t have to worry about whether or why people aren’t being paid. 
 
“This is why it is important that the payroll department offers employees support by providing them with insight into how their benefits work, how the payslip structure works to their advantage, and by adding value,” Haripersad states, while adding that providing employees with access and visibility regarding this information fundamentally changes how they engage with their pay and the company.
 
 “In addition to open discussion around payslip structure, the department should consider providing employees with their payslips earlier than on payday,” adds Haripersad. “They can then immediately see an abnormal deduction and query this before payment. Of course, any issues also need to be addressed quickly to avoid discontent or concern.”
 
Compliance and risk mitigation
The same extends into the area of compliance and legislation – well-oiled payroll departments with exceptional payslip acuity are more likely to mitigate business risk and limit employee dissatisfaction.
 
“Complying with legislation and ensuring accuracy in data and detail minimises the risk for the business and the employee,” says Haripersad. “The challenges around unionised employees can be managed by ensuring that they are taken care of correctly, and employees remain satisfied with pay and benefits. The business is assured of efficient payroll processes and a high level of service.”
 
A professional payroll team with the right tools and systems can transform the payslip from a page peppered with numbers into an understandable and reliable mechanism by which businesses run smoothly and employees remain happy. The extra mile in providing insight, explaining the layout and ensuring every detail is correct – or every error swiftly amended – can fundamentally impact on the working environment and employee satisfaction.
 
ENDS

MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za  
 
For more information on SAPA please visit:
Website: http://www.sapayroll.co.za/
Twitter: @SAPayroll
LinkedIn: The South African Payroll Association