Auditors appointed after companies 'fail to pay' workers Covid-19 relief funds

Employment & labour minister Thulas Nxesi has appointed auditors to follow the trail of money paid to companies since the start of the lockdown after it emerged that some had allegedly failed to pay employees.

The ministry on Monday appealed to companies not to take advantage of money  earmarked for employees.

“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. 

“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 [these] allegations are true, we appeal to companies to do the right thing still,” said Nxesi in a statement.

He said the Unemployment Insurance Fund (UIF) had paid out more than R21bn  benefiting 3,609,161 workers represented by 314,454 employers.

To date about R3.2bn from the first round of payments remains in abeyance as the fund awaits further details from employers to be able to soften the financial blow for at least 725,791 workers represented by 123,977 employers.  

“The May payments are already at R3.2bn and have benefited 782,602 workers represented by 57,260 employers. Unfortunately, even in this round 85,049 workers who would have benefited from R356m in payments have still not received the money as the details submitted by employers are missing,” the ministry said in a statement.

“It is tempting to think of this appeal as counterintuitive, 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,” said Nxesi.

The minister said though some companies had reopened as a result of the risk-adjusted strategy easing the lockdown, his department still grappled with helping companies that remain closed. 

“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 destitute,” he said. 

Nxesi appealed to companies to ensure compliance with the UIF Act, saying that the fund had made payments even in cases where companies had not been 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. 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,” said Nxesi.