1. DEPARTMENT OF LABOUR
COMPENSAYION FUND

2. LEGISLATION USED
• Workmen’s Compensation Act, 1941. Act No
30 of 1941
• Compensation for Occupational Injuries and
Diseases Act, 1993
Act no. 130 of 1993 as amended Act 61 of 1997

3. MISSION OF THE COMPENSATION FUND
• To compensate employees for disablement caused by occupational
injuries sustained and or diseases contracted in the course of
employment or their dependents for death resulting from such
injuries and or diseases and to pay reasonable medical expenses
incured

4. REVENUE OF THE COMPENSATION FUND
• Consists mainly of annual assessments paid by registered
employers on the basis of a percentage of the annual
earnings of their employees. This rate is fixed per industry
subclass.
• The Act, however, makes provision for a minimum
assessment to ensure that the assessment is not less than
the administrative costs.
• NB: All employers conducting any business in the Republic
of South Africa must register with the Compensation Fund

5. DEFINITION OF AN EMPLOYER
• Any person, including the State, who employs an employee
• Duties of an employer are as follows:
 Register as an employer with the Compensation Fund (Sec 80)
 Keep records of employee’s earnings (Sec 81)
 Furnish annual Return of Earnings (Sec 82)
 Pay annual Assessment (Sec 86)
 Report all accidents and or occupational diseases (Sec 39)

6. DEFINITION OF AN EMPLOYEE
• A person who has entered into or works under a
contract of service or apprenticeship or learnership
with an employer, whether the contract express or
implied, oral or in writing and whether the
remuneration is calculated by time or by work done
or is in cash or in kind, and includes;
 A casual employee employed for the purpose of
the employer’s business
 A director or a member of a body corporate who
has entered into a contract of service with the
body corporate in so far as he acts within the
scope of his employment in terms of such contract
 A person provided by a labour broker against
payment to a client,
 Excludes domestic workers

7. CONTRACTORS AND SUB
CONTRACTORS
• Contractor or sub contractors to register with the Fund and pay
assessment
• Failure to comply with the COID Act by the sub contractor will make
the mandator or contractor to be responsible for any claims from the
sub contractor’s employees
• The contractor may recover such payments direct from the sub
contactor

8. NON COMPLIANCE BY EMPLOYERS
• Will results in
 A temporary dummy registration in his names under
3394 subclass
 Estimated annual return of earnings
 Penalties and Interests being imposed

9. MUTUAL ASSOCIATIONS
• Rand Mutual Assurance Company Ltd (Rand Mutual)
for Mining Industry
• Federated Employers Mutual Assurance (FEM) for
Building Industry
• They operates under a license from the Minister of
Labour
• Permission is given for employers to be transferred to
them

10. EMPLOYER REGISTRATION NUMBER
• Starts with a 99 ( double nine)
• Subclass can be changed when the nature of business
changes
• Nature of operations determine the industry and rate for
assessment

11. SECTION 85 (LOADING AND REDUCTION)
• Provides for Increased and reduced rate, depending on the claim
costs of an employer in a 3 year period

12. ASSESSMENT YEAR
• Named according to the year it starts in, e.g. 2011 = 1 March
2011 to 28 February 2012
• Annual return of earnings, which reflect actual earnings paid to
all employees up to the maximum for the preceding year, as well
as provisional earnings, up to a maximum for the current year.
• Formula for calculating assessment is annual earnings x rate
divided by 100 = assessment for that year.
• Payable assessment amount =
 Final assessment of preceding year,
 Less provisional assessment raised for the
previous year
 Plus provisional assessment raised for the current
year.

13. LETTER OF GOOD STANDING
• Issued to employers who are in good standing with the Fund in
terms of COID Act
• Can be issued once in a year or monthly, depending on special
arrangements made with the Fund and it is now automated
• Requirements for issuing the letter are as follows:
 Employer must be registered with the Fund
 Return of earnings must be up to date
 Payments must be up to date, and penalties are
charge on late payments and interests are also
charged on revolving balance

14. PAYMENT OF ASSESSMENTS
• Direct deposit to ABSA Bank
 Branch code: 509 045
 Account number: 1007930905
 Use employer’s unique deposit reference number found on the
notice of assessment as your reference

15. FAILURE TO PAY
• 10% Penalty will be imposed in terms of section 87(1)
• The penalty will be calculated on assessment amount
excluding any other penalty already imposed
• Interests will also be charged in terms of section 86(2)
and is calculated on the assessment amount, excluding
penalties.
• Interests rate would be used as per PFMA

16. THANK YOU
JAN MADIEGA