13th month pay is now law |05 January 2017

A 13th month pay to both public service and private sector workers is now law. And it should be paid on December 31 each year.

But as the law has just been enacted, an exception has been made this year where all employees should be paid their 13th month on March 13, 2017 the latest.

But for the coming years, when the payment is due on December 31, all eligible workers should have been paid by January 3 the following year.

These clarifications were made yesterday by Veronique Bresson, special advisor in the Ministry of Employment, Entrepreneurship Development and Business Innovation in an interview with the media.

To be eligible for the 13th month pay, a worker should have completed one year in employment including probation period. This means that a worker who has started employment during the year 2016 and has not completed one full year will not be qualified for a 13th month pay. They will only be qualified as from the following year.

The department of employment has called it the 13th month pay and not 13th month salary to differentiate it from the normal salary scheme. It is a benefit that is paid to a worker and is therefore not considered when working out a worker’s gratuity or compensation.

The 13th month pay is equal to the basic salary and therefore does not include allowances, service charge or any other benefits. Workers whose basic salary is R10,000 or less will not pay income tax on the 13th month pay. But a tax rate of 15% will be applicable for basic salary which is more than R10,000.

Employers who fail to pay the 13th month pay is committing an offence under the law.

If a worker is on probation, they will gain their 13th month pay but they have to be one year in employment. For example if a person started work in March 2016, they are not qualified for a 13th month salary because they would not have completed 12 months in employment by December 31, 2016. They will benefit with that pay on December 31, 2017.

And employees who are not paid their 13th month pay are urged to inform the department of employment within the Ministry of Employment, Entrepreneurship Development & Business Innovation.

“The government announced this benefit in February 2016 which falls under the employment act. This benefit became legal and was gazetted in December last year, was approved by the National Assembly and it is therefore mandatory for all employers to pay and is applicable for most workers,” said Ms Bresson.

She explained that the 13th month pay decided by the government was to encourage good performance, retention of workers and more productivity.

“We do not encourage a situation where a worker is not taking their responsibility but automatically getting the 13th month pay at the end of the year,” Ms Bresson stressed.

Those not eligible for the 13th month pay are firstly foreign workers; participants on Skills Development Programme under the department of employment who are on attachment with work organisations, casual workers and workers who are earning a salary of R45,450 or more per month.

Ms Bresson also explained that employers who were already paying bonuses to their workers can merge them with the 13th month pay. If an employer is already paying bonus to the worker and if the bonus is more than the 13th month pay, then the employer may pay first part of the bonus as 13th month pay. The balance may then be paid as bonus to the employee.

But she also said employers are free to continue paying bonuses to their employees if they were doing it, over and above their 13th month pay.

Workers who are absent without authorisation, one day pay will be deducted from the 13th month pay for the first day of absence and three days pay will be deducted from the 13th month pay for each of the other days of absence.

She made it clear the employer is free to take disciplinary action against the worker.

“The law has made it clear that if a worker has 12 days absenteeism without authorisation, they will not benefit from the 13th month pay,” she said, while clarifying that the employment department does not expect a worker who has been absent for 12 days without authorisation or valid reason to be still in employment.

Payment by pro rata means workers who are on overseas training for more than 14 weeks or on unpaid leave for more than one month during the corresponding year, will be paid the 13th month pay in proportion to their physical presence in office. A worker who has committed an offence and is on remand for the year, is also eligible for pro-rata payment.

“We are asking all workers to be vigilant. If their employers are not paying them, they can always contact the employment department, and we will do the necessary for them to get their benefit,” said Ms Bresson.