A letter of good standing is an official document issued by the compensation commissioner proving that your payments to the Workman\u2019s Compensation Fund (COID) are up to date and that the COID will assist you to pay your employees for any work-related disaster, illness, injury, or even death.<\/p>\n
The document basically acts as a form of security to employers as it is an indication that they would not be responsible for bills incurred by their workers while on duty. Interestingly, COID, in every eventuality, covers the bills of both the employee and the employer regardless of whose fault it is.<\/p>\n Furthermore, in such a case, the employee cannot sue the employer because both of them are covered by COID according to the Act. When a company presents a letter of good standing, it simply means that such a firm is fully registered with the Compensation Fund and not owing them.<\/p>\n In summary, a letter of good standing is issued to an employer who fully pays his COID assessment fees and honors the installment arrangement, and such employer is regarded to be in good standing, not only when he registers with the Compensation fund but also submits his company’s annual return of earnings, pays assessment in full and reports accidents in time too.<\/p>\n Before we talk about what you stand to gain if you have a letter of good standing, let’s look at the set of people that needs it. You need this document if:<\/p>\n Back to the uses of the document, the letter of good standing is very important and beneficial as well. You can use the letter for so many things. Some of them are listed below.<\/p>\n Before the Compensation commissioner issues you a letter of good standing, there are processes you must pass through. One of them is the COID registration. In fact, it is the first thing you must do before carrying out other processes.<\/p>\n Let’s quickly take a look at the step-by-step processes of getting a letter of good standing.<\/p>\n The full meaning of COID is Compensation for Occupational Injuries and Diseases (South Africa). Another term for it is Workman’s Compensation. Once a company is in good standing, it is the duty of COID to provide compensation to cover workers who sustain an occupational injury or suffer any form of misfortune, including death, which is received by the employee’s spouse or children.<\/p>\n During the process of registration, you are expected to pay a registration fee. There are two ways you can register: first, through any of the companies that assist people in COID registration or you may choose to do it online through the Labour Department.<\/p>\n Employers are expected to register with the Commissioner at the Compensation Fund within the first 7 days of hiring their first employee. COID registration process takes a couple of days and it is made easier when you have your documents complete.<\/p>\n Requirements For COID Registration Are:<\/strong><\/p>\n To begin registration online<\/strong><\/p>\n Some sources have it that COID Registration (Workmans Compensation) plus Letter of Good Standing costs about R1800 while renewal of Letter of Good Standing (Workmans Compensation) costs around R1250. You can find out more about the cost from the Department of Labour.<\/p>\n Note: <\/strong>You have to submit a certified copy of your Company Registration Certificate together with your form if have already registered your company.<\/p>\n Once you finish applying for COID, you will be issued a unique identification or registration number called the CF number. The CF registration or reference number usually starts with 990000 followed by 6 unique numbers.<\/p>\n Once your registration is successful, the next step is to submit the total estimated wage and salary expenses for the year of your company (according to financial years). This is to ensure that the Compensation Fund accurately calculates the amount payable to them.<\/p>\n COID calculates a company’s fee as a percentage of the company’s yearly total wage and salary expenses. This means you have to submit your company’s wage and salary expenses every year in a Return of Earnings document.<\/p>\n If you are registering for the first time, you must present the documents mentioned above. However, you only need to present the document called the Return of Earnings if you are renewing.<\/p>\n There is always a deadline for the submission of your RoE. It is against the law if you fail to do so at the right time and penalties will be charged. And, to avoid interest, payment must be made within 30 days.<\/p>\n This is the final step, after which you will be issued your letter of good standing. You will receive a Notice of Assessment (NOA) stating the amount you will pay to COID in about 3 working days after the submission of your Return of Earning document.<\/p>\n The notice will be forwarded to you by the Department of Labour. Once your payment is successful, you will be issued a Letter of Good Standing showing your employees are covered for a year.<\/p>\n There is a monthly payment option for those who can’t afford the yearly payment option. However, you will still need to put down a 30% deposit. This option also entails that your Letter of Good Standing will only be valid from month to month upon payment.<\/p>\n For this procedure, you need the following documents:<\/p>\n The Compensation Fund will not cover your employees at any time you fail to pay your COID fee or even forget to renew your Letter of Good Standing.<\/p>\n A Letter of Good Standing, which is issued by the Compensation Commissioner in South Africa, is valid for only 1 year. It can be renewed annually by the employee, who is expected to do so with the company’s Return of Earning document.<\/p>\n However, there is a monthly payment option for those who cannot afford to pay yearly. This option means that you have to make payments on a monthly basis and your letter of good standing document expires every month.<\/p>\n South Africa is one of the countries where every employee is entitled to workman’s compensation. Employees in this sense include those employed through a contractor. So long as the person is employed for the purposes of the employer’s business and he suffers an injury in an accident arising out of and in the course of his employment, such worker is fully entitled to compensation under the Act.<\/p>\n Those who are excluded from this class are casual employees such as people who work in households. The Workman Compensation wages contain a lot such as salaries, holiday pay, bonuses, sick pay, the value of gifts, overtime payments, meals, cell phone allowances, lodging, commissions, and more.<\/p>\n![\"\"](\"https:\/\/buzzsouthafrica.com\/wp-content\/uploads\/mm-e1635327706607.jpg\")
Uses Of The Letter Of Good Standing<\/strong><\/h2>\n
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Step-By-Step Process Of Getting A Letter Of Good Standing<\/strong><\/h2>\n
Step 1: Register Your Company with COID<\/strong><\/h3>\n
![\"Letter](\"https:\/\/www.corpnet.com\/wp-content\/uploads\/2019\/09\/legal-document.jpg\")
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Step 2: Submit Your Employee Expenses<\/strong><\/h3>\n
Step 3: Pay Your Yearly\/Monthly Fee To COID<\/strong><\/h3>\n
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What Is The Validity Period Of A Letter Of Good Standing?<\/strong><\/h2>\n
Every Employee Is Entitled to Workman’s Compensation In South Africa<\/strong><\/h3>\n
How To Apply And The Documents Required<\/strong><\/h3>\n