Description

All employers in South Africa must be registered with the Compensation Fund.

This applies to every employer which has one employee or more.

Workers compensation is statutory insurance that benefits both the injured employee and his or her employer. It’s one of the products of industrialisation. It gives employees guaranteed (although somewhat limited) benefits and it protects employers from common-law claims for damages.

If you do not register your business with the Compensation Fund you may face the following practical difficulties:

• If one of your employees gets injured on duty, the treating doctor or hospital will believe they cannot claim from the Compensation Fund and will demand payment from you. This could amount to hundreds of thousands of rands.
• You may be prevented from tendering for important contracts because you won’t be able to obtain a Letter of Good Standing from the Compensation Fund;
• If you do pay medical costs for an injured employee, you won’t be able to claim back payment from the Compensation Fund;
• If you get caught out, you can be assessed retrospectively and the relatively small amounts that you would have paid every year (but didn’t) will accumulate and attract interest – leaving you liable for far more than you can handle;

So, not only is it legally binding on you, as an employer, to be registered with the Compensation Fund but it meets a real need of both employer and injured employee.

But, do not assume that you are registered with the Compensation Fund – rather make sure in advance, before something goes awry!

Please therefore sign up for our New Business Registration service and we will register your business for you.

But, there’s more: if you register your business without our help, you may not be correctly classified and you may incorrectly report your earnings.

The Compensation Fund’s Annual Assessments are based on nature of business (which determines risk of accident) as well as employee Earnings (as defined – which determine the value of some benefits). If these are incorrect, you could face penalties for under-reporting Earnings or (arguably worse still), you could end up paying inflated assessments for decades and never know or never be able to recover the over-payments.