Save where your domestic worker works for less than 24 hours per month, it is a legal requirement to effect UIF deductions from a domestic worker’s remuneration and pay UIF contributions (the amounts payable are set out in Chapter 2 above).  

It is relatively easy to become UIF compliant notwithstanding long periods of non-compliance. The Unemployment Insurance Contributions Act provides as follows in this regard

• if an employer fails to effect deductions of the 1% employee contribution, the employee ceases to be liable for that amount and the employer becomes liable;[i]

• where an employer has failed to deduct the employee contribution and/or pay the employer contribution, the Unemployment Insurance Commissioner may make a reasonable estimate of the amount due by the employer in respect of both contributions; [ii]

• employers who have failed to make payments of the employer contribution and/or employee contribution are also liable for interest on the outstanding amounts in terms of the interest rate stipulated in section 1 of the Income Tax Act;[iii]

• in addition, the Unemployment Insurance Commissioner may charge a penalty of 10% of the unpaid amount.[iv]

In my experience, it is not the practice of the Unemployment Insurance Commissioner to charge penalties but only to require the employer to pay the outstanding amounts due (both the employee and employer contribution) together with  interest on that amount.

Given the limited nature or UIF contributions (as set out in Chapter 2 above), this may not constitute a significant amount.

In order to become compliant, the following steps should be taken

• follow the process for UIF registration set out in Chapter 7;
• insert the relevant dates of employment on the uFiling system (which will identify periods of non-payment);
• effect payment on the uFiling system;
• follow any compliance notices issued by the Unemployment Insurance Commissioner (there is a process to object to underpayment, penalty and interest assessment if necessary).

Click to download uFiling guide to assist you in making outstanding payments

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[i] See section 7(4) of the Unemployment Insurance Contributions Act

[ii] See sections 9A(1) and (2) of the Unemployment Insurance Contributions Act

[iii] See section 12 of the Unemployment Insurance Contributions Act

[iv] See section 13 of the Unemployment Insurance Contributions Act