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Tips, advice, and information for South African business owners

15 May

New Labour Compliance System

If you want to turn your business into a wealth creating asset, then you need to spend as much time as possible on growing sales, improving profit margins, and optimising cash flow. Administration is a necessary cost of doing business, but you don’t want to get bogged down in red tape. Therefore, the latest announcement of new measures to intensify labour compliance will be far from welcome.

Earlier this year, the Commission for Conciliation, Mediation and Arbitration (CCMA) reported an increase in the deliberate circumvention of the national minimum wage amongst employers. These unlawful practices included failing to pay workers what they were owed as well as changing employment terms unilaterally.

In response, the Department of Labour recently announced the introduction of an additional compliance measure: Impimpi Alive. The new system is an anonymous reporting platform that will enable employees to notify the Department of Labour (DOL) about any breaches of the National Minimum Wage Act via SMS. The DOL has vowed to dispatch inspectors within 48 hours and publish the names of egregious employers.

The implications for employers are twofold. First, and most obvious, Impimpi Alive will increase the risk of unlawful labour practices being detected and penalised. So employers who have previously flown under the radar may discover that there is a lot less room to hide and end up paying the price for non-compliance.

Secondly, while Impimpi Alive may be used for bona fide reporting, it will almost certainly be abused as well since anonymity will shield employees from any accountability. Disgruntled workers may report entirely fictitious grievances, leading to unwarranted disruption and headaches for innocent employers.

It is not entirely clear when Impimpi Alive will become available (the DOL originally announced that President Ramaphosa would officially launch it on Workers’ Day). In the interim, now would be a good time to double-check that all of your labour compliance is in order.

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