Employment Regulations
South African employment law appears complex and confusing when looking from an outside view although in some ways there are many similarities to other countries. South Africa taxes residents on their worldwide income, whereas non-residents are taxed only on income sourced in South Africa or deemed to be from a source in South Africa.
South African employment laws are mandatory for any employees that fall within their jurisdiction. Therefore, they apply to foreign nationals working in South Africa.
Key Factors to Consider When Employing in South Africa:
There are several key areas to be aware of within South Africa’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the South African laws and rules for both South African employees as well as foreign nationals.
Employee Entitlements
Time Off Work
Family Leave
Employees who have been in employment with the same employer for more than 4 months and who work for the same employer for at least 4 days per week is entitled to 3 days Family Responsibility Leave full pay per annum, with the exception of Domestic employees whose entitlement is 5 days.
Annual Leave Accrual Entitlement
The employee is entitled to 15 working days per annum on full pay. However the law states “21 consecutive days”(section 20 (2) (a) of the Act) and reference to a calendar will show that 21 consecutive days is 15 working days based on a 5 day week, or 18 working days based on a 6 day week.
Study or Religious Leave
Labour Law does not regulate leave for study or religious holidays. At present the situation is that should an employee wish to take leave for the purpose of religious holidays other than an official public holiday, then the employee must take paid annual leave or unpaid leave.
Official site: http://www.labourguide.co.za/conditions-of-employment/437-types-of-leave
Paid Sick Leave Entitlement
During the first 6 months of employment, the employee is entitled to 1 day sick leave for every 26 days worked. On the first working day of month number 7, the balance of the 30 days becomes available to the employee, less any days taken sick during the first 6 months of employment.
Maternity Leave in South Africa
The Act entitles the pregnant employee to four months unpaid maternity leave.
Employment Termination
If the employee has not performed in a satisfactory manner, the employer cannot simply dismiss him. The employer must be able to show that a proper procedure of evaluation, counseling, guidance and training has taken place, that the employee has been given a reasonable opportunity (with the assistance of a fellow employee or representative (if required) to state his case and to state what they think is the cause of the problem, and to state and implement (within reason) what measures the employee suggests are required to rectify the problem.
Notice must be given in writing (except when it is given by an illiterate worker).
- If the worker has been employed 6 months of less, 1 weeks notice is required.
- If the worker has been employed for between 6 months and 1 year, 2 weeks notice is required.
- If the worker has been employed more than 1 year, 4 weeks notice is required.
A collective agreement may reduce the 4 week notice period to not less than 2 weeks.
Official site: http://www.labour.gov.za/DOL/legislation/acts/basic-guides/basic-guide-to-termination
Pension Requirements
South Africa has a pension and employee insurance fund scheme. However, there is no statutory requirement for employers or employees to make pension contributions. Employers may make a tax deductible contribution to a private pension fund of up to 10% of the employees salary. They can contribute a further 10% although it is taxable by SARS.
Employee contributions are tax deductible and it appears there is no limit to this.
