Are certain companies taking advantage of UIF to enrich themselves?

The nationwide lockdown has financially affected scores of South African families. But, as the government attempts to assist businesses and their respective employees though the Unemployment Insurance Fund, are there businesses which are attempting to defraud the system?  

The Unemployment Insurance Fund is beginning to trail the money which has been disbursed since April. As auditors work on the matter, the Minister of Employment and Labour Thulas Nxesi, is appealing to companies to do the right thing and declare workers who still need to be paid.

To date, an amount of R3.2-billion from the first round of payments remains in suspension.

This is due to the Fund waiting for further details from employers. This money is meant to assist at least 725 791 workers represented by 123 977 employers.

“In as much as some companies have re-opened as a result of the risk-adjusted strategy which has seen the country move to 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. There are still a number of companies that are either still closed or in dire straits and we hope those workers are not left in destitute,” says Minister Nxesi.

Minister Nxesi adds the government has 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,” said the Minister.

The May payments are already at R3-2-billion and have benefitted 782 602 workers represented by 57 260 employers. Unfortunately, 85 049 workers who would have benefitted from R356-million in payments have still not received the money. This because the details submitted by employers are missing.

“It is tempting to think of this appeal as counter-intuitive in the sense that we would be wanting to save money because it is clear that the demands on the UIF going forward are going to be massive. But we move from the point that it’s important that workers are not disadvantaged and as such, we appeal for the details so that the Fund can help those who need the money or for whom this may be the only source of funds,” the Minister said.

Since April, the Fund has disbursed more than R21-billion. This has benefitted 3 609 161 workers represented by 314 454 employers.

Last week the UIF appointed auditors to follow the money trail. According to the Department of Employment and Labour, there are indications that some people and companies are taking advantage of the help being advanced to workers, 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 are allegedly loaning employees the money and that is not legal. We are 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 else other than the intended purpose. If this all these allegations are true, we appeal to companies to do the right thing still, said “Minister Nxesi.

He has also appealed to companies to ensure that they are compliant with the UIF Act, adding that the Fund has made payments even in cases where companies are not fully compliant. This was done as to avoiding putting workers at a disadvantage.

“There are many cases where companies have not declared workers or have not contributed to employees. We will be raising debt against those companies and they must know that they need to pay back with interest and other penalties owed to the UIF. It is in all our interest to do the right thing. Even without being compliant, we have done the right thing and still paid them the Covid-19 relief and they also have to do the right thing,” Minister Nxesi concluded.