Every employer in South Africa must register with the Compensation Fund. The Compensation for Occupational Injuries and Diseases Act 130 of 1993 makes it compulsory, and an unregistered employer remains personally liable for an injured employee’s compensation on top of penalties.
That last point is the one that matters: registration is not only a compliance obligation, it is what stands between an employer and a direct claim.
Business Requirements at a Glance
What COIDA registration and compliance involves.
- Registration with the Compensation Fund, through the Department of Employment and Labour
- Registration on employing the first employee, including casual and part-time workers
- Submission of an annual return of earnings declaring employee earnings
- Payment of the annual assessment, calculated on earnings and the industry risk rating
- Maintaining records of employees and earnings
- Reporting occupational injuries and diseases in the prescribed manner and within the prescribed period
- A letter of good standing, required by many customers and for tenders
- Compliance with the reporting obligations after an incident
Registration and Legal Requirements
The obligation arises with the first employee. A business with one employee must register, and so must a domestic employer in respect of domestic workers, subject to the position under the Act. Confirm the current position with the Department of Employment and Labour.
An unregistered employer is directly liable. Where an employee is injured and the employer has not registered, the Fund can recover the compensation from the employer, in addition to penalties. That exposure can be substantial for a small business, and it is entirely avoidable.
Registration is free. The assessment is payable annually based on declared earnings and the industry risk category, but registering itself costs nothing.
The return of earnings is annual and it is compulsory. Non-submission attracts penalties and blocks the letter of good standing.
Confirm the current registration process, assessment rates and return deadlines with the Department of Employment and Labour, since they are set in regulation and revised.
Documents and Ownership Information Required
What is generally required to register.
- CIPC registration documents and a company profile, or proof of a registered sole proprietorship
- Certified ID copies for directors, members or the owner
- The business physical and postal address
- A SARS tax reference number for the entity
- A business bank account in the entity’s name
- Details of the business activity, for the industry risk classification
- Employee numbers and estimated annual earnings
- The completed registration application in the current form
Tax, Licence and Compliance Requirements
The letter of good standing is what customers ask for. Contractors, tender authorities, landlords and larger customers routinely require it before allowing work on site, and it is issued only where registration is current and returns and assessments are up to date. A lapsed letter costs contracts.
Report injuries promptly and in the prescribed manner. The Act requires an employer to report an occupational injury or disease within the prescribed period, and late reporting prejudices the employee’s claim as well as attracting consequences for the employer.
The employee claims through the Fund, not against the employer. That is the bargain COIDA creates: employees give up the right to sue the employer for occupational injury in most circumstances, and in exchange receive compensation from the Fund without proving fault. Registration is what makes that bargain work.
Keep employee and earnings records accurate. The assessment is calculated on declared earnings, and under-declaring is both a contravention and a problem when a claim arises.
Contractors and subcontractors each carry their own obligation, and a principal can be liable for an unregistered contractor’s employees in defined circumstances. Ask every contractor on your site for a current letter of good standing.
COIDA is not health insurance and it is not UIF. It covers occupational injury and disease. UIF covers loss of income. Both are compulsory employer registrations and they are separate.
Free assistance is available through labour centres and the Small Enterprise Development Agency.
Process, Deadlines and Ongoing Obligations
Register with the Compensation Fund through the Department of Employment and Labour as soon as you employ anyone, and submit the return of earnings annually by the deadline.
Diarise the return of earnings against the annual deadline, and obtain the letter of good standing as soon as the assessment is settled.
Ask every contractor for a letter of good standing before they work on your site, and keep a copy.
Report every injury properly, in the prescribed form and within the prescribed period, and keep a copy of the report and the reference.
Never pay anyone to expedite registration or a letter of good standing. Registration is free and the process is published. Consultants who assist with submissions are legitimate; anyone charging for access or offering to accelerate an official decision for payment is not.
- Register on employing your first person, including casual workers
- Understand that an unregistered employer is directly liable for compensation
- Submit the annual return of earnings by the deadline
- Keep the letter of good standing current — customers require it
- Report occupational injuries within the prescribed period
- Declare earnings accurately — the assessment is based on them
- Ask every contractor on site for a current letter of good standing
- Remember COIDA and UIF are separate compulsory registrations
- Use free assistance from labour centres and SEDA
- Never pay anyone to expedite registration or a letter
Frequently Asked Questions
Do I have to register?
Yes, on employing your first person. The obligation applies to a business with one employee as much as to a large one, and registration itself is free.
What happens if I do not register?
The Fund can recover an injured employee’s compensation directly from you, on top of penalties. That exposure can be substantial for a small business and it is entirely avoidable.
What is a letter of good standing?
Confirmation that your registration, returns and assessments are current. Contractors, tender authorities and larger customers routinely require it before allowing work on site.
Is COIDA the same as UIF?
No. COIDA covers occupational injury and disease; UIF covers loss of income. Both are compulsory employer registrations and they are separate.
Registration requirements, assessment rates, return deadlines and reporting obligations are set in the Compensation for Occupational Injuries and Diseases Act and its regulations and by the Department of Employment and Labour, and are revised. Confirm current requirements with the Department.