Letter of good standing: step-by-step guide to get one in 2023

Letter of good standing: step-by-step guide to get one in 2023

A letter of good standing is a document that acts as a form of security stating that the South African Workman’s Compensation Fund will pay for any work-related injuries and illnesses. The document is given to employers, who then must pay an annual, semi-annual, or monthly fee. How does one apply for this document, and what is required during the application?

letter of good standing for a company
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Source: UGC

Any employer who has one or more employees under them is required by law to register with the WCA (Workers Compensation Assistance). This takes away any liability on the employer’s side should one or more of their employees suffer any harm resulting from work-related activities.

Applying for a letter of good standing

Employers have two options when it comes to the application. They can opt for the online application, which is the preferred method for most people, or do it the manual way.

Online application

Here is how to get a letter of good standing online.

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  1. Begin by registering your company with the Compensation for Occupational Injuries and Diseases (COID). You can do this by visiting the registration portal.
  2. Once you are on the portal, navigate to the top right ad click on the tab labelled ‘click here to register.’ If you already have an account, you will only need to input your login credentials and sign in.
  3. On the registration page, you will be asked to type in your identification number and contact information.
  4. To get a letter of good standing for a company, the applicant will also need to provide the company’s registration number.
  5. Click the ‘get individual’ tab to verify your identity.
  6. You will receive an email with a verification link.
  7. Click on the link to activate your account.
  8. Once your account is active, it is time to submit your employees’ expenses (typically the estimated salary expenses per year).
  9. This amount will be the basis upon which the compensation fund will calculate the money to pay your employee(s) in the case of an injury.
  10. Fill out the expenses in a document known as the Return of Earnings. You will need to fill out this document each year.
  11. Once you have filled out the form, you will receive a Notice of Assessment (NOA) from the South African Department of Labour. This will have information about the amount you should pay to the COID.
  12. Once you have paid this amount, you will receive a letter of good standing showing that your employees are covered for the month, half-year, or year (depending on your choice).
  13. Keep in mind that those who choose not to make a yearly payment will still have to pay 20% of the fee upfront.

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Applying in person

SARS letter of good standing
A lady filling out a form. Photo: pexels.com, @Alex Green
Source: UGC

If you are not a huge fan of online procedures, you can apply for a letter of good standing by making the application in person. Here is how to request a letter of good standing from the Department of Employment and Labour.

  1. Begin by visiting the Compensation Fund office at the Department of Employment and Labour (contacts are included at the end of this article).
  2. Obtain an application form to file your Return of Earnings.
  3. Complete the form and attach any necessary details as might be required.
  4. Submit the form to the Compensation Fund, which will then give you a Notice of Assessment stating the amount you should pay in the form of annual fees.
  5. Once you have paid the amount, the office will issue you a letter of good standing.

What are the conditions for a letter of good standing?

All applicants must meet the following conditions of the Compensation for Occupational Injuries and Diseases Amendment Act, No 61 of 1997.

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  • All outstanding debt must be settled before the letter can be renewed.
  • The applicant must be duly registered with the Compensation Fund.
  • The employer must be fully assessed and given a Notice of Assessment.
  • The employer must have successfully submitted all statements of earnings as set out in the COIDA.

Why do I need the letter of good standing?

Here are the primary reasons one may need to get a letter of good standing.

  • It shows you do not owe the Compensation Fund any amount.
  • It is proof that you have adhered to the law requiring all employers to register with the WCA.

What is a letter of good standing by the SARS?

The SARS letter of good standing is a tax clearance certificate one receives when all tax returns have been filed. SARS stands for the South African Revenue Service. The document is among the requirements for the award of tenders, some business transactions, and some job interviews.

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Contacts

request a letter of good standing
A lady making a phone call. Photo: pexels.com, @Anna Shvets
Source: UGC

Here are the various ways one can contact the Compensation Fund.

  • Location: Compensation House, 167 Thabo Sehume Street, Delta Heights Building, Pretoria
  • Phone: 0860 105 350 / 012 326 1570
  • Fax: 0866889836​
  • Email: cfcallcentre@labour.gov.za​
  • Website: www.labour.gov.za

A letter of good standing is one of the essential documents that dictate the relationship between the government, employers, and employees. The South African Department of Employment and Labour has made the application process for this document quite straightforward.

READ ALSO: How to check if a company is registered in South Africa 2022

Briefly.co.za recently created a guide on how to check whether a company is registered in South Africa. The business landscape in South Africa is quite vibrant, with thousands of organizations in different economic sectors.

Most of the firms operate legally in accordance with the country’s business registration laws. Others, however, are not registered. There are numerous reasons you may want to do a background check on a company. Read on to discover how to do this.

Source: Briefly News

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