In South Africa, the Skills Development Act of 1998 requires all employers who pay more than R500 000 per year in salaries to contribute towards skills development. This contribution must be paid to the Skills Development Fund (SDF) and can be claimed back by the employer if certain requirements are met. One of these requirements is the appointment of an SDF.
COMPLIANCE:
Failure to appoint an SDF can result in penalties and legal action against the employer. The Department of Labour can issue fines of up to 10% of the employer’s annual payroll for non-compliance with the Skills Development Act. In addition, employers may lose out on potential tax incentives and contracts that require compliance with skills development legislation.
Appointing an SDF has numerous benefits for employers. An SDF can assist in developing a skills development plan that is aligned with business objectives and can help identify skills gaps within the organization. They can also assist in sourcing training providers and managing training programmes. By investing in skills development, employers can improve productivity, increase employee retention, and enhance their competitiveness in the market.
Employers can claim back up to 20% of their skills development levy contributions by submitting a Workplace Skills Plan (WSP) and Annual Training Report (ATR) to their relevant Sector Education and Training Authority (SETA). These reports outline the skills development initiatives undertaken by the employer during the year and must be submitted by 30 April each year.
Essentially employers who do not appoint an SDF run the risk of facing penalties and legal action. Appointing an SDF, employers can benefit from improved productivity, increased employee retention, and enhanced competitiveness. Employers can also claim back up to 20% of their skills development levy contributions by submitting their WSP and ATR to their relevant SETA. For a free SDF evaluation, email info@coetzeehr.co.za.