A no-fuss guide to starting a business (Part 3)

So far in this series we’ve covered planning and research, the types of businesses you can start, your legal and tax obligations and how to register a company.

As your business grows, you may find that you need to hire employees in order to contribute to the work you’re doing. As an employer, you have certain obligations to your employees in terms of payment, work hours and overtime, as well as their working environment.

What about casual labour?

The Basic Conditions of Employment Act of 1983 (BCEA) was amended in 1997. Before that, a casual labourer was defined as someone who worked for three days or less per week and they didn’t enjoy the same protections as permanent employees. Since the amendment, all employees who work over 24 hours a month are covered by the BCEA.

Even people who work for less than 24 hours a month for an employer are counted as employees and protected by the Labour Relations Act of 1995 and Employment Equity Act of 1998.

What are your responsibilities as an employer?

Whether your employees are permanent or temporary, they need to be paid at least the minimum wage for your sector at a specified time (daily, weekly, fortnightly or monthly). They also need to receive a payslip that shows any deductions you make, such as UIF, income tax, medical aid etc. UIF is compulsory for all employees who work more than 24 hours a month and income tax needs to be deducted for employees who earn more than the tax threshold.

You are legally required to provide a safe working environment for your staff, including all the current COVID-19 requirements.

Employees are entitled to the following types of leave:

  • Annual leave: 21 consecutive days (3 weeks) paid leave per year
  • Sick leave: 6 weeks of paid sick leave during a 3-year cycle
  • Family responsibility leave: 3 days paid leave per year
  • Maternity leave: 4 months unpaid leave – a mother can claim from the UIF during this time
  • Paternity leave: 10 consecutive days of unpaid leave – similarly, a father can claim from the UIF

The following regulations only apply to employees with a gross annual salary less than R211,596.30:

  • Working hours: no more than 45 hours a week
  • Overtime: no more than 10 hours overtime a week
  • Meal break of 1 hour after 5 hours work
  • Extra pay for working on Sundays, public holidays and at night

Ending employment

You and your employees have equal responsibilities when it comes to giving notice, which needs to be in writing. The notice periods are:

  • 1 week for employees who’ve worked for less than 6 months
  • 2 weeks for employees who’ve worked 7 months to 1 year
  • 4 weeks for employees who’ve worked for 1 year or more

When an employee leaves their job, they are entitled to a certificate of service that gives the details of their time of employment with you. They’ll also need to be paid out for any outstanding annual leave days. In the next article we’ll look at employing freelancers or independent contractors.

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