A letter of good standing is a document required for any person running a business. The document is essential to both the business owner and employees. With the document, it is always easier to win a contract or do major business transactions in South Africa. Particularly, the COID letter of good standing also covers all the occupational injuries and diseases for employees. However, do you know how to acquire one?
Often, most business owners do not know how to go about this process. Perhaps, it is because they do not even understand its significance. Well, to start with, one has to reach out to the Department of Labour. Here, a business owner can get all the essential information needed to initiate the process.
How do I get a letter of good standing?
Obtaining this document is as simple as ABC. Importantly, one has to have facts and some basic knowledge. The process entails three significant steps. Below is an outlined systematic guide on what to do as far as the process is concerned.
1. Register your organization with COID
The method of securing a good standing certificate starts with a business owner registering their organization with the Compensation of Occupational Injuries and Diseases (COID). The registration can be done either by online COID service providers or the Department of Labour itself.
Here, the owner of the organization is supposed to pay a registration fee as well as provide other identification documents. Precisely, the following are the requirements for one to get a workmen's compensation letter of good standing:
- A South African original ID
- An organization’s registration document
- A letter of good standing registration form
- An acknowledgment or any other evidence of payment for the registration process
The letter of good standing Department of Labour requirements may differ slightly when registering through a COID service provider. For instance, with the providers, one may need to seek the power of a lawyer throughout the preliminary stage of registration.
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How long does COID registration take?
The period depends on the mode of registration among many other factors. Nonetheless, if done manually at the head office in Pretoria, an employer can receive the registration number in less than three weeks. At times, it might take more than three months to get the COID registration number.
2. Submitting employee expenses
At this point, a proprietor is supposed to provide the approximation of their employees' overall earnings to the Department of Labour letter of good standing section. The expenses could also include the salaries paid in a whole year. This allows them to generate a percentage of the amount to pay to each employee.
The concept of Return of Earnings applies when computing the percentage, especially for renewals. To facilitate the process, an ROE labour document is made available at the end of each financial year. Similar to registration, a business owner can either seek the help of the COID service providers or the Department of Labour itself.
It is worthy to note that first-time applicants will find the submission form attached to the COID registration form. Afterwards, they should submit the expenses using the ROE document.
3. Timely payment of the fee to COID
The letter becomes effective immediately after the Notice of Assessment (NOA) from the Department of Labour is sent to an employer. Usually, the notice highlights the amount to be paid for the COID either monthly or yearly.
Payment to COID can either be done monthly or yearly for the compensation fund letter of good standing to be effective. If an employer chooses to pay monthly, they should be aware that the letter can only be effective a month before it is renewed again. Often, most business owners choose the annual plan as it is more effective compared to the monthly one.
Cons of not complying
Failure to comply might lead to the following penalties:
- Imposing of interest on late payments
- Serious consequences, especially when a worker passes away, and the employer is not a registered member.
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How long is a letter of good standing valid?
As mentioned earlier, the validity of the WCA letter of good standing entirely depends on the chosen plan. For instance, if an employer decides to remit the fees every month, it means that their employees will be covered on a monthly basis.
On the other hand, if they choose to pay the fees yearly, their employees will be covered for the whole year.
- The 30% deposit on the payable amount is applicable when one is paying on a monthly basis. So, it is upon an employer to figure out the form of payment that will suit them best. In other words, one can save the extra charges if they choose to pay annually.
- Irrespective of the time one registers the fund, employers are supposed to renew it in April every year.
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How significant is the UIF letter of good standing?
It is essential as the business itself. With it, staff members are assured of protection in case of work uncertainties. Most providers will handle all the processes on your behalf, giving you enough and ample time to concentrate on other managerial tasks.
Indeed, securing a letter of good standing is a wise move for any determined businessperson. While it is not obligatory, it can enable a business to develop in various manners. Also, entrepreneurs can maintain their business without the dread of vulnerabilities presented to their workers.
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Source: Briefly News