13 month salary committee ready to accept applications from businesses for financial support
February 15, 2017
Businesses not being able to pay their employees a 13th month salary can formally start procedures to receive financial support from a subsidy fund the government has put in place for the purpose. A subsidy fund of R10 million has been earmarked to help employers who are in financial difficulties to access support from the fund for a maximum of two consecutive years. Time enough for it to recover financially and duly honour its obligation to pay its employees.
This was announced by the Principal Secretary for Finance and Trade, Patrick Payet and the Principal secretary for Employment, Jules Baker in an interview with the Press recently. According to P.S Payet, a mechanism has been put in place to that effect.
Following an amendment in the Employment Act (Cap 69) for the introduction of the 13th month pay for all employed person, the Employment (Amendment) Act, 2016 Section 9 allows for the setting up of a 13th month salary committee. The primary objective of the 13th month pay committee is to vet, approve and also reject applications for Government financial assistance to employers who are unable to pay a 13th month pay to their employees.
The committee consists of six members appointed by the Minister responsible for Finance in consultation with the Minister responsible for Employment.
In order to be eligible for the 13thmonth pay financial assistance, applicant(s) must show proof of their inability to pay the 13thmonth pay to their employees. Applications submitted to the 13th month pay committee must be accompanied by the Profit and Loss statement as at last accounting year, latest payroll/payslips, letter of appointment and/or confirmation in post for all employees, business Tax or Presumptive Tax return statement, atest monthly Income Tax clearance certificate from SRC or summary of Income tax remitted to SRC on behalf of the employee, bank statements as of 31st December of the year for which the 13th month pay is due and for which the application is made.
In the case of very small businesses which may not be able to provide all the necessary documents, like cash flow statements, PS Payet said they will need to provide the maximum information requested by the committee. “We are placing a lot of emphasis on the need for these employers to inform their employees why they have not been paid their 13th month pay yet and that they have applied for financial support and once this is approved they will be notified and be paid their dues,” PS Payet stressed.
As all employers have until March 31 to pay their employees their 13th month pay, it is therefore expected that they will do the necessary to ensure they submit all applications and required documents by next week. The committee will start its assessment from February 26th and employers will get a reply within a week of submitting their applications.
On his part, PS Baker said that quite a number of businesses and companies have duly honoured their obligations and paid their employees but they do not have an exact figure to date as not all of them have submitted proof of payments as the deadline for payment, which is on March 31st has not yet passed. "There are more who have already paid but they are yet to declare," stated P.S Baker. According to Mr. Baker, the employment department has not yet received any complaints from employeers not receiving their 13th month salary. But said that the department will accept grievances from employees after March 31.
To ensure that the financial assistance provided to the employer is used in accordance with the purpose for which it has been made, the Ministry of Finance, Trade and Economic Planning would publicise successful applicants for transparency and accountability purposes.
And employers have 7 days to effect the payment on the account of the employee(s) for which the approval was granted. Proof of payments shall be kept by the employer and made available to the 13th month pay committee within 15 working days after the date the financial assistance was provided.
Application forms are available on the Ministry of Finance, Trade & Economic Planning Website; www.finance.gov.sc, and at the Ministry of Employment.