An Introduction To COID Registration And The Letter Of Good Standing
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What is COIDA?
The Compensation for Occupational Injuries and Diseases Act (Act 130 of 1993) replaced the "Workmen's Compensation Act" (Act No. 30 of 1941), and was amended in 1997.
The Compensation Fund provides compensation for occupational injuries or diseases sustained or contracted by employees in the course and scope of their employment, or their dependents for death resulting from such injuries or disease, and to pay reasonable medical expenses incurred.
Who must register with COID?
According to prescription, anyone who employs one or more part- or full time workers must register with the Compensation Fund and pay annual assessment fees. The Compensation Fund is a trust fund that is controlled by the Compensation Commissioner and employer contributes to the Compensation Fund. The Commissioner is appointed to administer the Fund and approve claims lodge by employees or their dependants.
An employer must register with COID within seven days after the day on which he employs his first employee. An employer must register with the Commissioner by submitting Form W.As.2 with the particulars required therein to the Commissioner.
During COID registration copies of the following documentation should be included:
- the registration certificate from the Register of Companies if they are a company or closed corporation;
- or their ID document, if they are sole owners of the business.
What are assessment fees?
The annual assessment fee is of an employer is based on their employee's earnings and the risks associated with the type of work or profession. Before 31 March each year, all employers (including contractors) must submit a statement (return) of earnings reflecting amount paid to all their workers from the beginning of March to the end of February.
Assessment tariffs, reviewed annually, are based on the risks related to a particular type of work.
Payment of assessments
- Employers must pay within 30 days of receiving the notice of assessment;
- Employers must apply in writing to settle assessments in installments (not exceeding 12 months);
- 20% of the outstanding balance due is required upfront before instalment arrangements can be applied for;
- Should the instalment fall overdue, the full amount becomes due and payable immediately.
Failure to comply may result in:
- Penalty can be imposed for late submission of ROE (Sect 83(2) – 10%);
- Estimations will be done if no returns (ROE) are submitted (Sect 83(6)(a);
- Penalty on non-payment of assessments (Sect 87(1) – 10%);
- Interest on late payment of assessment (prevailing prime rate);
- Penalty for late reporting of accidents
- A penalty is imposed where an employee meets an accident / death and employer is not registered with the Compensation Fund (not exceeding full compensation payable to the employee (Sect 87(2)(a))
- An employer who fails to comply with a provision of this section shall be guilty of an offence – Sect 81(3)
Contractors and sub-contractors:
Contractors and sub-contractors must register with the Compensation Fund and pay assessments;
Failure to comply with the COID Act by the sub-contractor will make the mandatory or main contractor to be responsible for any claims from the sub-contractor’s employees (thus the need for a letter of good standing);
The contractor may recover any such payments directly from the sub-contractor.
Letter of Good Standing:
The Letter of Good Standing is a certificate issued by the Compensation Fund to verify that a business actually exists, has paid all its statutory dues, has met all filing requirements and, therefore, is authorised to operate.
Conditions when applying for a letter of good standing:
- Employer must be registered with the Fund as per section 80 of the COID Act,
- Employer must have submitted all returns of earnings as per section 82 0f the COID Act,
- Employer must be fully assessed as per section 83 of the COID Act,
- Employer must have paid/ settled all outstanding debt as per section 86 of the COID Act.
- Employers that have entered into an instalment arrangement will only be issued with a letter of good standing on a month‐to‐month basis.
What happens if an employee is injured?
The amount of compensation paid to you, depends on how much you were earning when you got injured or diagnosed. If you’ve stopped working by the time a disease is diagnosed, the compensation will be worked out according to what you would’ve been earning.
Types of compensation:
Medical costs: All your medical expenses will be paid for up to 2 years, from the date of the accident or the diagnosis of the disease. You are free to choose a medical service provider you want to consult with. All medical accounts and reports should be submitted to the Commissioner.
Temporary disability: When you’re unable to work or can’t do all your work because of an injury or disease.
All medical expenses are also paid if the medical accounts are submitted to the Commissioner.
You can claim compensation for temporary disability for 1 year. This can be extended to 2 years, after which the Commissioner may decide that the condition is permanent and grant compensation on the basis of permanent disability.
Permanent disability: A permanent disability is an injury or illness that you will never recover from. The seriousness of the disability will determine whether you’ll never be able to work again or whether you’ll find work more difficult.
If the disability is more than 30% disability, you will get paid a monthly pension. The size of the pension depends on what your wages were and on the seriousness of the disability. If the disability is 30% or less, you’ll get paid a lump sum. The lump sum payment is a once-off payment.
Death benefits: Burial expenses will be paid and the spouse of the deceased and children under the age of 18 (including illegitimate, adopted and step-children) are entitled to compensation. If a family member that earns money to support the family (breadwinner) is killed by an occupational injury or disease, dependants can claim from the fund.
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