Employers will be required to ensure that they comply with the announced increase in the maximum earnings level which comes into effect tomorrow,1 July 2006.

Earlier this month, Minister of Labour, Membathisi Mdladlana announced an increase in the remuneration ceiling to a level of R11 662.00 per month or R139 944.00 per annum or R2 691.23 per week to be effective as of 1 July 2006.

The Department has warned employers that failure to comply with these provisions of the Act constituted an offence which was punishable in terms of the Act. The offender shall be liable to a fine or imprisonment, or to both..

The UIF on a yearly basis sets a maximum earnings ceiling, in terms of which benefits are paid and contributions are payable.

All workers who earn above the maximum level will only contribute up to the maximum and when they become unemployed will then receive benefits at the rate of their contribution.

The maximum earning level is benchmarked at the level of what an artisan is currently earning. It was also aimed at keeping pace with the inflation rate.

Between October 2005 and July 2006, the Fund had managed to put an extra R2 826.00 in the salary ceiling. This could only make the Fund more attractive to both the low and high income earners.

By adjusting the annual contributory earnings, there was also a corresponding increase in benefits to workers. This step further highlights the importance that the fund places on improving the lives of the workers.

The 1 July increase was published in the Government Gazette on 2 June 2006.

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