With the continual increase of the unemployment rate in South Africa, the Unemployment Insurance Fund has redirected its attention to non-compliant companies, Cape {town} Etc reports.
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Teboho Maruping, the UIF commissioner, claimed that the fund continues to visit companies which register and deduct contributions but do not make payments to the fund.
UIF aids in short-term financial relief for unemployed workers, workers on maternity leave and for those on sick leave.
Furthermore, it provides relief to the dependents of a deceased breadwinner.
The law mandates that an employer must pay the UIF for an employee who works more than 27 hours a month.
Employers are required to register as a contributor to UIF and to register relevant employees as beneficiaries.
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Employers who fail to comply will continue to be penalised by the UIF.
BusinessTech reports that more than R100 million has been recovered from non-complaint companies in the past month.
As it stands, the UIF has 2.4 million registered employers and accounts for 4.6 million employees at large.
‘It is crucial to crack the whip on non-compliant employers’ says Maruping.
According to the official unnemployment rate, the number of unemployed persons in the country equates to 8.4 million or 33,5% of the population.
The expanded unemployment rate stands firm at 42,6%.
This rate includes individuals who are ‘off the grid’ or have given up hope of finding employment.
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Maruping further commented that while the UIF holds the funds for compliant employers, it is not equipped to handle increasing dependents or the continual increase in the unemployment rate.
The UIF however also faces claims of corruption as multiple tales of problematic experiences have surfaced.
As a result of these allegations, the Department of Employment and Labour intends to decouple the UIF and the Compensation Fund, thereby making two separate entities, independent of the department.
This is to ensure that the UIF and the Compensation Fund are stabilized and repurposed.
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