COIDA Registration and Letter of Good Standing

All companies in South Africa that employ one or more part-time or full-time employees must register for COID (Compensation for Occupational Injuries and Diseases ) and obtain a Letter of Good Standing yearly. A Coid registration aims to protect employees who sustain injuries and contracted diseases while performing their work duties. COIDA and COID are terms that are generally used interchangeably. 

At Tenderkom, we understand that navigating the process of Coida registration and obtaining a Letter of Good Standing can be confusing, frustrating, and time-consuming. That’s why we’ve created this article to help businesses like yours understand the process.

What is COIDA?

COIDA is a South African law that compensates employees injured or contracting diseases while performing their work duties. The law mandates that an employer register with the Compensation Fund within 7 days of hiring his first employee and contribute annually towards the Compensation Fund, which is used to pay out benefits to injured or ill employees.
The Compensation Fund is a trust fund under the jurisdiction of the Compensation Commissioner. The Commissioner oversees the Fund’s administration and grants employees or their dependents claims. Therefore, only the employee or their dependents, not the employer, will get compensation from the Fund.

The Benefits of Registering for COID in South Africa

  1. Legal Compliance: Registering your company with the Compensation Fund ensures you are legally compliant with the Compensation for Occupational Injuries and Diseases Act. Avoiding registration can result in fines and penalties from the Department of Employment and Labour
  2. Financial Protection:
    Compensation Fund provides financial protection for employees who are injured, become ill, or contract diseases due to work-related activities. The Compensation Fund covers the medical costs, rehabilitation, disability, and even funeral expenses for the deceased employees. By registering with the Compensation Fund, employers can protect their employees from financial distress that may arise due to an injury in the workplace.
  3. Employee Morale:
    Registering with the Compensation Fund shows employers value employees’ well-being, boosting employee morale. Knowing that they are covered under COID provides employees with peace of mind that they will be taken care of in the event of an injury or illness due to work-related activities.
  4. Improved Work Environment:
    Registering for COID can also improve the work environment within a company. The focus on employee well-being can increase the motivation and satisfaction of employees with their work and workplace. A safe working environment leads to happier, healthier employees which can reduce work-related accidents in the long run.
  5. Access to Compensation: COID guarantees access to compensation for employees who become injured or ill due to work activities. If an employee is injured, they can file a claim for benefits, including medical expenses, lost wages, and other compensation benefits. Consequently, this can prevent an injured employee from pursuing litigation against their employer, avoiding costly legal battles.

Our team at Tenderkom can help you with COID registration, Letter of Good standing, and yearly Return of Earnings (ROE) submission.

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How to Register for COIDA

The process of registering for COIDA can be complicated and time-consuming, but it is essential for all companies operating in South Africa. Here are the steps to follow:
1) Employers that are obliged to register with the compensation Commissioner must register by submitting Form W As 2 to the Commissioner with the information requested therein. Information typically requested includes the number of employees, date of first employee employment, the salary of employees, industry under wish business operates, Directors ID copies, and business banking details.
2) The forms can be couriered or dropped at the offices of the Department of Labour. Registration takes 21 working days or more

NOTE: At Tenderkom, we can register you for COID within 1 to 15 working days max
3) Once your company has been registered with the Compensation Fund, a notice of assessment will be issued requesting you to pay an annual assessment fee. The annual assessment fee to be paid would depend on the risk of your industry, the number of employees declared and the payroll amount declared when completing the form.

4) Once the assessment fee has been paid to the Compensation Fund, you would then be able to request a letter of good standing from the Department of Labour which is your proof of compliance with the Compensation for Occupational Injuries and Diseases Act -COIDA

What is a Letter of Good Standing?

A Letter of Good Standing is a compliance document issued by the Compensation Fund to a company that has complied with all the requirements of COIDA. This letter confirms that the company is up-to-date with its annual assessment fees and has no outstanding payments. This letter is essential for companies that have registered for COID and want to do business with other entities, apply for tenders, or renew their licenses. Many government departments and private sector entities require a letter of good standing as part of their procurement processes. Without this document, it can be challenging to secure tenders or renew licenses, which can be detrimental to a business.

Companies can request a letter of good standing from the Department of Labour via email or in person. The request must be made by the employer or an authorized representative of the employer. The Department of Labour will conduct a compliance check before issuing the letter of good standing.

What Next?

After registering for COIDA, employers must submit a Return Of Earnings (ROE) every year.

So what is Return of Earnings (ROE)?

Return of earnings or ROE is an annual assessment that employers are mandated to submit yearly declaring their current number of employees and payroll as well as their provisional number of employees and payroll for the coming year. The Return of Earnings (ROE) must be submitted every year before May 31. Once the Return of Earnings (ROE) has been submitted, a new assessment fee would be issued based on the information supplied. Once the assessment fee is paid, you would be able to request a new Letter of Good Standing.

COIDA Registration and Letter of Good Standing