Employment and Labour Minister Thulas Nxesi reports that, during the second week of June, the Unemployment Insurance Fund (UIF) appointed auditors to investigate whether money paid to employers, to help bridge employees salary deficits during the Covid-19 pandemic, is being paid in full to affected employees.
As a result, the UIF reports that there are already indications that some people and companies have allegedly taken advantage of the help being advanced to workers and are instead “seeking to enrich themselves”.
“It is alleged that there are companies that have not paid the workers what is due to them. We are aware of some companies allegedly loaning employees the money and that is not legal,” states Nxesi.
He says the Department of Employment and Labour is also aware of other companies that are allegedly paying part of the money and not the full amount, as well as companies using the money for something other than the intended purpose.
“If these allegations are true, we appeal to companies to do the right thing still,” he says.
Meanwhile, he also appeals to companies to declare workers who still need to be paid as a result of the depressed economic environment that has arisen from the Covid-19 pandemic and subsequent lockdown.
To date, an amount of R3.2-billion from the first round of payments remains suspended as the UIF awaits further details from employers, to be able to soften the blow for at least 725 791 workers represented by 123 977 employers.
The May payments made by the UIF stand at R3.2-billion and have benefitted 782 602 workers, represented by 57 260 employers. However, in this round of payments, 85 049 workers who would have benefitted from R356-million in payments, have still not received the money as the details submitted by employers are missing.
“In as much as some companies have reopened as a result of the risk-adjusted strategy which has seen the country move to Alert Level 3 of the lockdown, we acknowledge that there are still people who would find the injection from the UIF helpful and making a huge difference,” he states.
Nxesi adds that there are still a number of companies that are either still closed or in dire straits.
“As government we have committed to ensuring that the worst effects of the pandemic are mitigated through making available a basket of services and other interventions. The UIF has been exemplary in rising to the occasion and helping make the difference,” he says.
“. . . the demands on the UIF going forward are going to be massive,” notes Nxesi.
Since April, the fund has disbursed more than R21-billion, benefitting about 3.61-million workers, represented by 314 454 employers.
He has also appealed to companies to ensure that they are compliant with the Unemployment Insurance Act, adding that the fund has made payments even in cases where companies are not fully compliant because it did not want to disadvantage workers.
“There are many cases where companies have not declared workers or have not contributed for employees.”
In this case, the amounts paid to these companies will be in the form of debt, which the companies would need to pay back, with interest and other penalties owed to the UIF.