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Preparing your domestic staff for leaving your employ

We found out what measures you should take in order to ensure your domestic worker is financially secure after they leave your employ.

26 October 2021 · Joshua White

Preparing your domestic staff for leaving your employ

Your domestic workers occupy an important role in your life, whether by taking care of your home, and possibly your children, or keeping your garden in shape. A strong bond might, therefore, form between you.

Unfortunately, there may come a time when a domestic worker leaves your employment, either due to their retirement or you having to make them redundant due to financial constraints.

We found out what measures you should take in order to ensure your domestic worker is financially secure after they leave your employ.

READ MORE: Domestic workers: What are their rights?

Ensure Domestic Workers are financially secure


The importance of UIF

According to Silke Rathbone, principal partner at Labour Excel, you must register a domestic employee for the Unemployment Insurance Fund (UIF) as soon as they start working for you. You and your employee will each contribute 1% of their remuneration to the UIF. Rathbone notes, however, that it is your obligation to pay this amount and ensure that a total of 2% is contributed.

Rathbone says, “This will enable the employee to claim compensation from the fund in the event that they are dismissed or retrenched, their contract is terminated, or they go on maternity leave. It provides the employee with some kind of safety net.”

The UIF will pay out for up to four months of maternity leave, and 12 months of unemployment. Rathbone notes, however, “This depends on how many credits the employee has, which is determined by the number of years they have been contributing and how many times they have claimed.”

“For the employee to be able to qualify for the maximum number of credits, contributions will have had to be made to the UIF for at least 4 years,” she explains.

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What about the minimum wage?

If your domestic worker is earning the minimum monthly wage, which is currently set at R3,500, they will receive a higher percentage of their pay from the UIF than someone who earns a higher income.

Rathbone explains that unemployment benefits range between 38% and 60% for the first 238 credit days, after which a flat rate of 20% will apply, up to day 365. The lower the employee’s salary, according to Rathbone, the higher the chance they will be paid at the maximum rate.

In the case of maternity leave, an employee can expect to receive between 38% and 58% of their monthly salary. Once again, the less they earn, the higher the percentage they’ll receive.

Rathbone also explains, “The payout will also be influenced by whether or not the employee has claimed UIF for maternity leave in the past 4 years.”

What about retirement?

Unfortunately, the UIF will not pay your domestic worker if they retire or resign. For this reason, Rathbone explains, some employers make it mandatory for their employees to belong to a pension fund. “There is a vast range of different pension funds, depending on what your budget is,” Rathbone says.

Old Mutual and 1Life offer pension and preservation funds specifically for domestic workers. It is well worthwhile investigating the options to ensure that your employee has provision for their golden years.

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