Author: Cathie Webb, Director at The South African Payroll Association During Women’s Month, it is important to consider the gender related problems we still face as professionals. One of the major concerns is the gender pay gap. Although this gap has been growing smaller over the past years, it remains a legitimate problem. Even in a female dominated sector (such as retail, healthcare, cleaning, primary education and secretarial and administrative functions, including payroll), it is often found that male employees are paid more than their female counterparts for the same work. Some of the remedies women can consider regarding the gender pay gap include: choosing to further your education in a field you know is in demand, completing your education, choosing a field or sector that pays well, negotiating your salary at each new career step and requesting constant on-the-job training. Being a true professional A payroll professional is a payroll employee who not only performs their basic job requirements, but also comprehends the implications of managing the payroll function in their business environment. They should be able to add strategic input to the company they work for, rather than only producing accurate and timeous pay slips. Relevant advice on issues such as pending changes to tax law and requirements, making recommendations and transitioning their knowledge with ease from one type of business to the next are some of the important skills a payroll professional should have. Depending on their level of employment and the size of the employer, they should be able to manage a team, deal with HR issues, advise employees on tax issues and be able to manage projects. The importance of the right qualifications Traditionally payroll employees were trained by their predecessors and by the manufacturers of the payroll software used by the company. These imposed limitations in the scope for understanding how to improve systems and a wider view of business and strategy as a whole. As with all other qualifications, when the trained professional learns about the “outside world”, how other professionals work and what is considered to be best practice internationally, they will have a broader impact on their business and be able to add more value. Until the early 2000’s, there were no formal payroll qualifications available in South Africa. An FET certificate in Payroll Administration (NQF Level 4) and an NQF Level 5 Diploma were then introduced, which were both approved by the South African Qualifications Authority (SAQA). Training providers were also accredited by the Services SETA. In late 2015, a BCom degree with a focus on payroll was launched by the Da Vinci Institute for Technology Management, a Mode 2 university. The Da Vinci Institute selected Accsys as the payroll faculty for the degree. These qualifications assist in teaching payroll employees the necessary skills they will need to perform more than just their basic work. Awarding payroll professionals Each year SAPA runs an awards programme for payroll professionals. The programme is designed to give recognition to the people who make a difference in the payroll industry and in their respective businesses. The awards programme serves to motivate payroll employees to go the extra mile in their jobs and truly become payroll professionals. There are three levels in the awards programme, Junior, Senior and Team, and nominees must satisfy strict criteria that measures their professionalism. A list of the criteria is available on the SAPA website, as well as information on who can qualify for the awards, the nomination process and the awards themselves. Nominations for the 2017 awards closed on the 11th August, 2017 and winners will be announced at the Annual SAPA Conference on 6th September 2017 at Emperors Palace. ENDS MEDIA CONTACT: Idéle Prinsloo, 082 573 9219, idele@thatpoint.co.za, www.atthatpoint.co.za For more information on SAPA please visit: Website: www.sapayroll.co.za Twitter: @SAPayroll LinkedIn: The South African Payroll Association
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The payroll environment is not for the faint-hearted. It is demanding, exacting and driven by deadlines. It is a career where mistakes can be expensive and missing a deadline potentially catastrophic. For those who work in this industry it is essential that they possess a strong work ethic, a commitment to quality and the ability to deliver measurable and reliable outcomes.
Keeping pace with the monthly deadline and the daily checks can be challenging, but those who have the determination can provide organisations with essential and relevant insight and value. “The critical factor is to have the right knowledge and skills as these will ensure success in the payroll environment,” says Lavine Haripersad, Payroll Manager, South African Payroll Association (SAPA). “There are several training milestones that have to be achieved in order to build the knowledge required to become a comprehensive and reliable payroll professional.” Payroll professionals should be up to date with the latest payroll legislative requirements, understand best practice and governance, and be aware of industry trends impacting on the payroll environment. This understanding will allow them to make informed decisions about their role, the work they do and driving business growth. It is a challenging environment, but it is also a rewarding one, especially if the practitioner is committed to education and training. Connecting the dots “Conferences and events are incredibly valuable for professionals who want to expand their knowledge base and their career opportunities,” says Haripersad. “In addition to attending sessions that offer insight and education, there is the chance to network with other practitioners in the industry. Most events offer attendees a forum where they can connect directly with thought leaders, partners and leads.” The weight of knowledge that is traditionally borne by the payroll professional has not previously been recognised as much as it is today. As compliance and legislation continue to impact on mandate and deliverable, the role has become increasingly important. It is vital that practitioners understand how their skills influence organisations and people, and how to capitalise on this to improve performance and engagement. “It is essential that every practitioner map their road to success and have a clear understanding of issues around legislation impacting payroll, labour laws affecting payroll, governance, employee benefits, payroll education and technology,” adds Haripersad. Conference In September, the South African Payroll Association will be hosting the SAPA Annual Conference. It is set to run from 6th -7th September in Johannesburg with two half-day regional conferences scheduled to run on 12th September in Cape Town and 14th September in Durban. The theme of the conference is ‘Portraits of Success’ and it has a clear mandate to focus on how the payroll practitioner can drive personal and professional success through knowledge and understanding. “It is our objective as an organisation to promote excellence in the payroll profession and ultimately create our own ‘Portraits of Success’,” concludes Haripersad. “It is an opportunity for payroll practitioners to learn from the smartest minds in our industry while connecting with their peers and building their careers.” 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 need to rethink payroll services and follow the international trend of investing more in mobile self-service solutions, advises Lavine Haripersad, a director at the South African Payroll Association (SAPA). “It’s time to put payroll in your employees’ pockets or purses. Mobile devices are having a huge impact on our lives,” she adds. The mobile experience According to industry experts, mobile penetration in South Africa is around 37% to 45% of the population. This is due to the introduction of cheaper smartphones as well as a growing dependency on mobile communications for everyday life and business. South Africans use their devices for a myriad of personal activities. At work, however, employees often face the frustration of lengthy processes to complete simple tasks - like leave applications - or access their personnel information. This is in direct contrast to their typical online experience. “We need to see workers as consumers and find ways to provide the experience they’re used to. That means going mobile,” states Haripersad. What’s available? Many reputable software vendors, such as Accsys, Intuit, Oracle, Sage and SAP offer employee self-service products for small, medium and large businesses, although their features vary. Also, managed services companies providing outsourced payroll services may use a self-service app to make information accessible and reduce costly interactions. “While many apps exist,” advises Haripersad, “companies are usually restricted to the one produced by their business system’s developer.” The following are the most popular features: · View and update personal information Payroll staff spend a lot of time reviewing records. It’s more efficient to allow employees to do it themselves. Their changes can be approved by their manager before updating the payroll database, depending on the workflow structured into the system. · View payslips Notify staff when their payslips are ready through their mobile device and let them download a digital copy. This could save companies millions annually in printing and distribution costs. These are also fast becoming acceptable to retailers who require proof of income. · PAYE & IRP5 Allow employees access to their tax data to keep track of their tax obligations, answer tax queries and submit their returns easily with the information on hand. · Managing leave Reduce manual processing by letting staff submit leave requests through the self-service app. They’ll also be able to check their remaining leave, reducing your payroll administrator’s workload. · Travel & expense claims Employees can submit their travel claims together with other expenses. These can be automatically forwarded to their manager for approval before being submitted to the payroll administrator. · Time & attendance Depending on the app, employees could clock in or out with their smartphones, enter the time they worked on a task, or even be reminded of when their next shift will start. · Employee benefits Staff could, at any time, check their benefits to see their current status, such as the value of their pension plan or available funds in their medical aid scheme. · Manager benefits Using a mobile application for items like leave, payroll input or training application approvals saves a line manager a lot of time, as it can be done “on the go”, while being able to be assured that your staff are at work when they should be is also useful. Ultimately, using mobile applications which allow employees to participate in what used to be traditional payroll processing, will allow payroll staff to spend less time servicing common requests and focus more on strategic activities. In conclusion, Haripersad encourages every organisation to investigate the benefits of a mobile self-service app. “Technology is evolving fast and payroll must keep up if companies want employees to be happy and productive. This means making information and services available to them in a way they’ve come to expect.” SAPA will be hosting its annual conference this year titled Portraits of Success as follows:
To register visit http://www.sapayroll.co.za/Events/Conference.aspx 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 The current economic outlook is set to have an impact on the bottom line, business and morale, but robust payroll auditing and management processes can curtail risk and support growth. Even in a recession there are specific steps that can be put in place to mitigate risk and enhance payroll effectiveness, ensuring that finances are tightly controlled and that the organisation is prepared for what the recession has in store – spread the payroll load, use the insight from payroll data, and clearly document processes. “The most common risk area in payroll departments is having one person responsible for the calculation of payroll values, reconciliation and payment,” says Cathie Webb, director, South African Payroll Association. “In a recession, when people feel their jobs and income are at risk, there is a temptation to help themselves to a little bit on the side.” Webb points out that on a psychological level, incremental thefts are often not perceived as a crime. People think that the tiny sums won’t hurt the business. However, this is not true. Every cent removed illegitimately from a business has an effect on every person working there. Reducing the risk “The easiest thing to do to reduce risk is to ensure that the different areas of the payroll cycle are the responsibility of another person,” says Webb. There must always be a high-level view over every aspect of payroll. In a large organisation, it is fairly easy to ensure that the payroll audit is managed by different people, but in a smaller business this may not always be possible. In this instance, there needs to be another person who does sign off and checking before payments are made. “Payroll also plays a supportive role in tough economic times,” says Webb. “Strong payroll administrators should be looking for areas where they can add value and strategic input. For instance, in a multi-departmental branch or organisation, they can assess things like leave patterns and even identify management issues. Payroll has the ability to uncover behavioural patterns that can be managed or enhanced to boost business productivity, cut back on waste and even encourage growth in a recessive environment.” Document and detect Payroll can use its understanding of finances and budgeting to support employees and businesses in better managing money. South African suffers from a debt culture and few people save for the proverbial rainy day. Payroll’s role in educating people, showing them the value of not spending more than they earn and giving them the tools they need to save for the future, will play a role in the financial success of the organisation. Finally, payroll’s place in protecting against the impact of the recession can be found in the documentation. Webb recommends that the payroll department has clear checks and balances that are adhered to rigorously as it is one space where mistakes and missed deadlines cannot be tolerated. “This way, payroll frees their minds from having to remember the small things so they can focus on ways to add value,” concludes Webb. 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 Author: Arlene Leggat, Director at the South African Payroll Association (SAPA) The Minister of Labour announced an amendment to the “scale of benefits” described in the Unemployment Insurance Act, 2001 (Act No. 63 of 2001) on March 17th this year, to be implemented from April 1st. The statement has caused much confusion across the payroll function, affecting employers, payroll departments, payroll consultants and payroll software vendors. The question on everyone’s lips is: if the benefits have changed, should the contributions payable by employees increase in step with the new targets? In this article, I’ll deal with the problem, its cause and the solution. The problem Firstly, the wording is misleading. The announcement uses the term: “scale of benefits”. However, the figures mentioned are actually the limits of benefits to which UIF applicants are entitled, i.e. they can’t claim amounts above this ceiling. The scale of benefits refers to brackets of income previously earned by a beneficiary and the corresponding percentage of that income they may claim at each level. These brackets might not even be affected, and the articulation of the change could have been clearer. Secondly, UIF benefits are perceived to be closely associated with UIF contributions. So, payroll practitioners assume that changes to the first will have a direct impact on the latter. To compound the confusion, changes to both have historically been implemented together on 1st April, and the updating of payroll systems is a given. Therefore, many practitioners were led to believe that contributions must be included when, in fact, payroll is not affected at all. Contributions fall within the ambit of the National Treasury and are governed by the Unemployment Insurance Contributions Act of 2002. Benefits, however, are distributed by the Department of Labour and are regulated by the Unemployment Insurance Act of 2001. While each law sets brackets against which contributions must be deducted or benefits paid, these tables need not correlate. This can be seen in a 2015 draft bill raised by then Finance Minister, Nhlanhla Nene, which proposed a reduction in UIF contributions. Government Notice 187 of March 2015 assures the reader that “The proposed contributions reduction would not reduce the unemployment insurance benefits payable to beneficiaries.” Although the bill never passed, the notice highlights that contributions ceilings need not match benefits ceilings. Thirdly, since each function is managed by a different Minister, an amendment by one Minister does not constitute an amendment by the other. By law, each Minister must announce any changes separately by way of government gazette. Still, amendments by the Minister of Finance regarding UIF contributions must be made in consultation with the Minister of Labour and the UIF Commissioner, and vice versa. This suggests a high level of collaboration and correspondence between the two offices. Surely, at such close quarters, consideration should be given to communicating the status of each law in regards to the other. In other words, the confusion should have been anticipated and addressed as part of the legislative roll-out. The source of confusion It’s the payroll practitioner’s duty to understand the laws governing their function. However, by the number of queries received by SAPA from parties across the industry, it’s obvious that the change was not communicated effectively enough to clarify its scope and implications. SAPA representatives contacted the UIF in an attempt to offer our members an official response. Surprisingly, the UIF representatives with whom we corresponded assured us that the amendment was applicable to both contributions and benefits. But when pressed to provide a gazetted announcement by the Minister of Finance, they were unable to do so. Currently, the matter is under investigation with the UIF and we’ve received no further information. It seems obvious that the source of confusion is a lack of coordination between the relevant lawmakers and their departments, and poor communication to the public in general. What should you do? First, don’t jump to any conclusions. Last year it was reported that the UIF had amassed a R99-billion surplus. Therefore, they might be in no hurry to increase contributions until they have to. SARS seems to confirm our thinking, with the existing limits still displayed on their UIF web page at the time of writing. Next, obey the law. Until the Minister of Finance gazettes any changes to the UIF contribution structure in accordance with the Act, it should be business as usual. Do not update your payroll software’s tables or deduct higher contributions from employees because, without official notification, this could prove illegal. SAPA will continue to pursue this matter and keep its members abreast of developments. Photo caption: Arlene Leggat, Director at SAPA 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 The recent downgrade of South African government debt increases economic uncertainty, with unpredictable effects. “While many of the outcomes of the downgrade have been surprising, one thing is clear: government debt is going to be more expensive. That will almost certainly mean that both local interest rates and taxes will continue to rise,” says Cathie Webb, Director, South African Payroll Association.
“Payroll departments need to be taking proactive action to help employees negotiate these difficult economic conditions, which our current political turmoil is exacerbating.” The Reserve Bank has indicated that further downgrades remain a possibility, further affecting the cost at which the government can finance its escalating debt. How to help Webb argues that Payroll needs to understand the pressures that employees face during tough economic times, and where they are spending their take-home pay. While this may seem beyond the department’s remit, in fact financial insecurity has a direct impact on employee motivation and engagement, and thus on productivity. The likely rise in interest rates will have an immediate impact on disposable income, she says. Employees who already have debt need to be educated about how to manage it in the event of an interest-rate hike—and those who are not in debt should be encouraged to remain debt-free. Other financial pressures would include increased taxes, be it VAT or personal tax, or both, as well as higher petrol prices. Fuel costs increase food inflation, creating sustained pressure on household budgets. The economic pressures caused by the downgrade will also impact the ability of employees to save. The country already lacks a savings culture, with the savings rate having declined from around 24 percent between 1960 and 1990, to 16.5 percent between 1991 and 2014. This deprives the local economy of investment capital for growth and development. At a personal level, a lack of savings means that a majority of South Africans will not retire on sufficient capital. “The only real solution is proper budgeting—and then sticking to it. Too few South Africans actually do the exercise of understanding how they spend their money, and how they should be spending it,” Ms Webb says. “But if your personal finances are in disarray, there is a knock-on effect across everything, including performance at work. Payroll simply has to see its role more broadly in the quest to attract and retain the best talent for the company. That will include helping them to manage money better in tough times.” 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 Author: Arlene Leggat, a director at the South African Payroll Association (SAPA) South Africa has a higher than average rate of overtime fraud owing to limited prevention and detection systems, and a workforce which has become dependent on the financial advantage it offers them. Every year another story revealing extensive overtime fraud hits the media, exposing how easy it is for employees to defraud companies. In February 2017, 283 employees were implicated in the Merafong municipality for committing fraud estimated to be valued at millions of Rands. Overtime fraud is a lot more prevalent than we want to believe. The challenge is that most companies tend to not take the case further than a rap over the knuckles - dismissing the person and making them another company’s problem. The right thing to do is charge them and ensure they get a criminal record. Alongside a clearly defined policy around overtime fraud, or theft of any kind, the threat of criminal action will go a long way towards making anyone think twice before they lie about the hours they’ve worked. It isn’t, however, the only step that must be taken towards effective prevention. Measures of prevention Employees need to realise that overtime fraud can be as little as claiming one or two extra hours a month, not just 200. A lot of people don’t see those little hours here and there as fraud. It is. And it should net them a criminal record. Organisations must educate employees on overtime hours, what constitutes fraud, and what will happen should they be caught committing it. Then, they need to invest in systems which can mitigate fraud overall. One such solution would be to implement an automated clocking-in system. It isn’t infallible, but it does allow for improved control over hours spent working versus hours put down on billing. Another option is to implement controls within payroll, making it the last line of defence. The business must put its overtime policy into play from the start and it must ensure that it is strictly adhered to. It also needs to comply with overtime legislation as outlined in the Employment Act. Two sides to the story The Basic Conditions of Employment Act states that employees are not allowed to work more than three to four hours of overtime per day. The number of hours is dependent on the length of the standard work day, and the role of the employee. Collectively, within a seven-day period, you are not allowed to work more than 10 hours of overtime – it is legislated and companies cannot change this at will. Unfortunately, this is largely ignored by most companies in South Africa due to several factors, including a lack of skilled staff. So, if overtime policy isn’t being adhered to and the company isn’t enforcing it, then it opens the door for employees to commit fraud. Consequences count There must be someone monitoring overtime, checking it against systems and legislative parameters and enforcing its adherence rigorously. Not only will this limit the employee’s ability to commit fraud, but it will ensure that an eye is always on the overtime ball. If employees believe that there are no consequences and that they can push boundaries, they do. This then leads to a weakened moral culture within the business, and that can have far reaching effects on morale, productivity and, of course, fraud. To limit the potential for overtime fraud and to ensure that employees are also protected against working more hours than they should, the organisation must actively develop policy to monitor it. Payroll has a pivotal role to play in balancing overtime requested against internal policy and legislation, ensuring that hours are kept within legal limits from the outset. 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 It’s not uncommon for a payroll to be consistently managed so poorly that workers threaten to strike over incorrectly administered pay. Often, the person administering the payroll is not adequately qualified for the job. Lavine Haripersad, a Director of the South African Payroll Association (SAPA), says such risks are why hiring accredited payroll practitioners is so important. Yet, many employers don’t realise how much skill it takes to run a payroll. “There are literally hundreds of legal requirements and specialised procedures to follow,” she says. “It’s therefore critical that organisations have professional payroll administrators who know, understand and can practically implement them.” So what do the top payroll administrators know (that business managers sometimes don’t)? Correct Procedure Payroll consists of various processes that must be correctly executed. “Qualified payroll administrators know these processes intimately,” says Haripersad. “These processes include record keeping, employee take-on, month-end procedures, year-end procedures, and more.” Calculations There are many complex payroll calculations related to tax, medical aid, pension funds, provident funds, allowances, reimbursements, deductions or bonuses. A payroll administrator knows how to perform them in accordance with the latest legislative requirements. The law Payroll is governed by an extensive set of legal and regulatory requirements. Payroll administrators are trained in the law and ethical governance, and keep themselves updated on new standards as part of their duties. “So they act as advisors to their organisations, guiding them in the right direction to avoid legal problems,” says Haripersad. Information management Payroll information and data must be collected, stored, secured, destroyed and used in accordance with various laws and accepted procedures. “The safeguarding of employee data must adhere to the Protection of Personal Information Act,” warns Haripersad. The proper information must also be submitted to the government at defined intervals. And correctly calculated payroll aggregates must be reported to accounting for recording in the general ledger. “Payroll administrators are well versed in the function of information inside and outside the organisation.” Tax Employee tax is so critical it demands special attention and skills only a professional payroll administrator can provide. This is especially true of larger organisations where the taxable portion of intricate remuneration, allowances, expense claims, deductions, bonuses or perks schemes is difficult to determine. Ethical practices Accredited payroll administrators are specifically disciplined in ethics and bound to the association’s Code of Professional Conduct. Not only do payroll administrators have an authoritative standard to work to; employers also have in SAPA a means to resolve unethical or unprofessional behaviour. The same can’t be said for non-certified administrators. Project management Payroll administrators are also trained to work in dynamic environments like project management where each payroll project might be different from the last. They therefore have project management training and can often act as project administrators. Strategic advisors Overseas companies see payroll for what it is - a key business enabler. International payroll administrators can work towards a Master's Degree in payroll management and provide direction to national and global payroll initiatives. But even a single organisation can derive such value from a well-trained payroll administrator. Payroll administrators offer a wealth of knowledge that an employer can leverage to their benefit. Says Haripersad: “If organisations see payroll administrators as managers rather than workers, they will appreciate the strategic value they stand to gain from their input.” 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 It is essential that employers support employees in recognising if they are suffering from Post-Traumatic Stress Disorder (PTSD) and that they understand the difference between this level of stress-related illness and other forms of work-related stress or fatigue. The Occupational Health and Safety Act and the Compensation for Occupational Injuries and Diseases Act (COIDA) both recognise the impact of PTSD on employee and employer. It is a potentially debilitating condition which affects performance and personality and there are a number of symptoms which can be attributed to it. “PTSD is not the same as normal workplace stress,” says Cathie Webb, Director at the South African Payroll Association (SAPA). “Difficulty with another employee, extended working hours or a toxic working environment – these are factors which impact individuals on a different level from PTSD. There should be processes in place to resolve these challenges internally already, but for an employee to benefit from an employer’s contribution to the Compensation Fund, they would have to suffer from symptoms that are far more severe.” The Compensation Fund is a mandatory fund to which all employers must contribute. From the moment a business hires its first employee, the organisation has seven days in which to register with COIDA. Employers have to detail the type of work undertaken by the business, and pay towards the fund on an annual basis. The impact of stress “The outline of the Act is simple – keep track of incidents while performing agreed work which result in physical injury or mental illness and follow the guidelines,” says Webb. “It is designed to protect the employer from having to deal with litigation for each employee and give the employee financial support as they recover. Any injury or illness covered by the Act has to be medically approved.” The employee has to see a medical professional who will confirm that they are unable to function in their role. Some of the symptoms of PTSD which would be immediately visible to the employer would include constant hyperventilation when facing the situation which caused the problem, crippling levels of anxiety or fear, and excessive sweating. “Whether or not a person would qualify for the support of the fund depends on a number of factors,” says Webb. “They would need to see a psychiatrist who would confirm they have PTSD and they need a certificate which verifies the diagnosis. Employers should also remember that they have to apply for the fund within six months of the incident taking place in order to ensure their employee is given the support and time off that they need.” In addition to the above parameters, the employee will also have to go to a panel to confirm whether or not they need to be booked off or if they are eligible for the compensation fund. It is the employer that needs to submit the claim and employees’ money will be send to their employer’s address. If employers do not send in the forms or the claims takes too long, the employee must contact the nearest labour centre and report it. The ideal employer “PTSD is a delayed or protracted response to an exceptional catastrophic event which causes distress and can have a long-term impact on an employee,” says Webb. “The employer has to recognise the symptoms within the person, but also be aware of the events themselves.” The employer needs to assess the situation and note if someone is always battling to cope with their role after an incident. For example, this could be a member of the military forces that experienced a violent incident. They need to be aware of the symptoms of PTSD and have a workplace ethic which supports staff when it comes to stress or trauma. Although the act caters for employees that are faced with PTSD, it remains the employer’s responsibility to ensure that other layers of work-related stress are catered for, creating a positive working environment throughout the business. ENDS MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@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 by Nicolette Nicholson, Director, South African Payroll Association (SAPA)South African air carriers and operators are increasingly seeing the rest of the continent as an attractive growth target. No matter what particular business model they adopt in the target country, they are likely to find themselves seconding pilots, cabin crew, engineers and other employees to their in-country operations. In general, these expatriates would remain on the payroll of the South African or parent operator. Making salary payments to crew working in another country raises a whole set of inter-related issues that payroll professionals need to consider carefully. While not exhaustive, the following are some of the key areas to think about: Draft a cross-border remuneration policy It is critical that the operator has a policy in place that sets out the principles relating to how the company deals with employees working across borders. The policy should protect the interests both of the company and its employees. Many of the subsequent points would be integrated in the policy, as well as in the individual employee contracts. A payroll professional would be best suited to advise air carrier owners on what this policy should look like. Ensure that the employee is not disadvantaged by his or her secondment One important principle is that the employee should not be financially or otherwise disadvantaged by the requirement to work in a foreign country. At a practical level, this means considering carefully what the tax rules in the host country are—tax rates might be higher or tax compliance more complex—as well as the terms of the double taxation agreement between South Africa and the host country (if there is one). An added consideration here would be to consider how much time is expected to be spent outside of the Republic, and the impact this would have on tax. For example, it might be that the package is structured based on the fact that the employee is expected to be exempt from paying tax in South Africa because he or she is out of the country for more than 183 days in aggregate, 60 of which are continuous, in a 12 month period. Thought needs to be given to the impact of the employee forfeiting this tax exemption by having to make an unplanned trip home, either for business or personal reasons. If deemed a South African resident by SARS, an individual would be liable for normal taxes, including PAYE, and this could be hugely negative if the exemption condition is not met. How to handle such unexpected events should be covered in the policy. These kinds of complexities, and the fact that the unexpected could happen, means that many operators actually opt for simply paying a home nett salary and taking care of the employee’s tax themselves on behalf of the employee. Although this approach has the virtue of simplicity, it must also be recognised that SARS will treat this payment of employee PAYE as a payment of the employee’s debt. This is seen as a taxable benefit in the hands of the employee and thus increases the employer’s the cost of the employee. Structure the reward package carefully for tax compliance While ensuring that the employee is not disadvantaged, it is equally important that his or her cross-border package complies with the tax regimes in both countries. In practice, employees on secondment are usually paid a premium in the form of a hardship allowance or similar subsistence allowance, and this should be structured in a way that is beneficial to the employee while remaining tax-compliant in both countries. Both employee and employer need to fulfill their tax obligations to the host and home countries, and tax evasion should be avoided as it is a criminal offence. Give thought to medical aid and evacuation While an individual is on secondment in a foreign country, he or she would need to continue paying South African medical aid in order to avoid late joiner penalties. Late Joiner Penalties may be imposed on members over the age of 35 if they have not belonged to a medical aid before, or if they have had a break of more than 90 days from a medical aid. Depending on the number of years that they have not belonged to a medical aid, a late joiner penalty will be added to the member’s monthly contribution and worked out as a percentage of the contribution based on the total number of years a member has not been on a medical aid since the age of 35 years. But he or she would also need medical cover in the foreign country. Who pays for this, and what are the arrangements if urgent repatriation for medical or other reasons is indicated? Does the employee’s death benefit cover cross border deaths? Death is normally not a topic that forms part of general discussions, but an employer needs to make sure that the policy in place to cover death covers cross border eventualities. An employer might find themselves in trouble if such an event occurs and the employee was not covered outside the borders of South Africa. Ensure that proper precautions are in place as this can also result in an increase to the cost to the company. In conclusion, it should be apparent that this a complex area, and the payroll policy needs to be robust in order to copy with different eventualities. My advice would be for air carrier owners to work closely with a payroll practitioner that specialises in cross border remuneration structuring to understand the issues fully, and to structure the company policy and individual employment contracts. One might find that the cost to the company is much higher than budgeted for as the secondment could result in unanticipated costs if not thought through thoroughly before drafting both the business contract and the employee contract. ENDS MEDIA CONTACT: Cathlen Fourie, 082 222 9198, cathlen@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 |
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