FEM EMPLOYER GUIDE

Ed 2 - 2019

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Table of contents

About FEM and COID FEM and the Compensation FundRegistering with FEM

Standard Assessment RatesCompleting the Annual AssessmentLetter of Good StandingMerit Rebates and Loadings

Advantages of belonging to FEMReporting an AccidentThe Claims ProcessFAQsContact Information

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MissionWe strive to deliver an excellent and sustainable workers compensation service to all stakeholders by:• Being the preferred provider of COID cover• Promoting health and safety, and accident prevention

• Engaging and empowering our workforce

Vision

Values

ETHICS

RESPECT

ACCOUNTABILITY

CONTINUOUSIMPROVEMENT

CUSTOMERFOCUS

EMPLOYEERECOGNITION

EFFECTIVECOMMUNICATION

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1. About FEM and COID

Workmen's compensation is a compulsory form of insurance providing wage replace

(130 of 1993) or The COID Act.

The aim of the COID Act is to provide for compensation to employees, or their dependents, in the case of death or disablement caused by occupational

provide for matters connected therewith.

The Federated Employers Mutual Assurance Company (RF) (Pty) Ltd, also known as FEM, was established as a mutual insurer in 1936, to provide workmen’s compensation insurance to the construction industry, under a special licence granted by the Minister of Labour. FEM carries out its duties alongside the Compensation Fund (CF).

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2. FEM and the Compensation Fund

Each branch consists of:

• Regional Manager• Branch Claims Manager• Claims Supervisors• Claims Administrators• Registry Administrators• Consultants• Underwriting Administrators

Link to the Compensation Fund

The law applicable to the Compensation Fund was passed in 1941 (Act No. 30 of 1941) and repealed by the law passed in 1993 (Act No. 130 of 1993) (“The COID Act”). The COID Act is aimed at providing compensation in a form of payment and medical aid for disablement caused by accidents to or industrial diseases contracted by employees in the course of their employment and for death or disease resulting from such accidents.

in terms of the COID Act. One of those functions is to administer the insurance policies, in terms of the COID Act, thus resulting in the State being the insurer and the administrator of the Compensation Fund.The Minister of Labour, in terms of section 30 of the COID Act, can issue a license to carry on the business of insurance of employers against their liabilities to employees in terms of the COID Act, to a mutual association. FEM is one of the two private sector companies that have been issued a license to provide services under the COID Act. The compensation, in terms of the COID Act, is funded by the employers. The COID Act places an obligation on these employers to make contributions on an annual basis.

According to the license referred to above, FEM is only licensed to provide services to employers in the Construction Industry. Such employers have an option of either insuring their Workmen’s Compensation Liability with the Compensation Fund or with FEM.

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Underwriting

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3. Registering with FEM

NEWLY REGISTERED COMPANIES 1. Completed FEM application forms.2. Company registration documents.

4. Letter from bank (not older than 3 months)

of operations(as per current underwriting year) on a company letterhead.6. Completed Record of Information.

1. Completed FEM application forms.2. Company registration documents

4. Letter from bank (not older than 3 months)

5. Copy of previous assessment from the Compensation Fund.

On a company letterhead:

i. Reason for the transfer. ii. Number of employees. iii. Actual wages and salaries prior year. iv. Actual wages and salaries current year up to proposed transfer date.

EXISTING COMPANIES

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1. Industrial rating is based on the nature of business carried out by an employer.

2. For rating purposes, employers have been divided into 23 Classes, namely:

• Building)

• •

Local Authorities,Personal Services, Professional Services, Educational, Charitable, Religious, Trade Organisations, etc)

3.

4. Each class bears its own accidents costs.5.

cost of accidents, during the year of assessment, including administration costs.

6. periodically by the Compensation Fund, if nec

year, based on the severity of accidents for each class of business.

7. FEM has been granted a license by the minister of labour to offer Workmen's Compensation to the construction industry. Companies whose nature of business falls under the following descriptions, can register with FEM.

CLASS V - CONSTRUCTION

0500All building operations, including demolition work; painting and plastering not elsewhere rated; tombstone erection; construction of swimming pools, including maintenance not undertaken as a separate business; electrical contractors; cladding;furnace builders; (where the above mentioned building operations involve work in connection with buildings over two storeys or other structures over 12m in

0501(i) Ceiling contractors, installation of composition

such operations are incidental to the business of a plumber; sports ground construction; asphalt con

protection devices; landscape gardening; domestic

construction,cleaning of trenches; cutting of reeds.

(iii) Sign erection including sign writing on buildings.(iv) Maintenance and cleaning of swimming pools as a separate business.

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0502

tion with any structure or waterworks not elsewhere stated, or in connection with sanitary engineering

ing.Note:Only the direct earnings of employees expended on these operations should be segregated unless the

to this rate.

0505Water boring and any other drilling activities not elsewhere stated.

0512Operations of civil engineers (only) including earthmoving, not elsewhere stated; road making; Irriga

railway construction; dam construction; breakwater,

operations; digging trenches; shotcreating;Note:a) Direct wages expended in connection with tunnel

b) Asphalting of roads and streets is regarded as an operation incidental to road making. Operations

this subclass.

0521Maintenance and operation of irrigation works and water works not otherwise stated. pivolts erection and installations

0530

dustrial plants including constructional steel

scaffolds including shuttering; any work pertaining to the alteration, repair or demolition of buildings, steeples, towers or chimney shafts over 12 m in height as a business.

0531

Note: Companies in this class have the option to ei-ther insure with FEM or the Compensation Fund.

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5. Standard Assessments Rates

Standard Assessment Rates

The process of determining the premium payable is called an assessment. The rates used to determine the premium payable, are provided by the Minister, once a year, in a document called the Government Gazette. The assessment rates differ from one class to another. The annual premium payable by the employer is determined by calculating the annual earnings, paid by the employer to his or her employees, multiplied by the applicable rate.

Variation of Standard Assessment Rates

eral to assess an employer at a lower or higher tariff of assessment than the tariff of assessment for employ

opinion that the business of the employer is managed in a manner that will prevent accidents during the course of work and should there be any accidents, the number of such accidents and the costs incurred by the employer as a result are likely to be less than those usually occurring in comparable businesses. FEM applies this practice in line with the COID Act.

There are two types of tariff assessments that are applicable in terms of the COID Act namely • Merit Rebates and

These are explained in detail in Section 8.

Minimum Premium

The minimum annual premium that is payable by the employer to FEM is

R2500 p.a.

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6. Completing the Annual Assessment Employers must submit their Return of Earnings (ROEs), by 31 March of each year.

ROEs will include the actual wages paid in the pre

year, and the estimated wages for the current year,

Maximum wages are published in Government Gazettes and made available by FEM at the start of the underwriting year.

On submission of the ROEs, FEM will assess the returns and invoice the policyholder accordingly. Payment is due within 30 days of assessment.

Once payment has been received by FEM, a Letter of Good Standing

FEM Online makes it easier to submit your Return of Earnings. Employers can now register their policies

This is a faster process and ensures employers get as

Letters of Good Standing from any organisation.

For registration and a 'how to' guide, log onto

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7. Letter of Good Standing In terms of the COID Act a Letter of Good Standing may only be issued by FEM provided: • The latest Employer Return of Earnings has been received by FEM. • Any outstanding premium has been paid in full.

FEM shall at its own discretion institute criminal proceedings against perpetrators who unlawfully alter or deface this letter with intent to defraud or misinterpret facts contained herein.

Understanding the Letter of Good Standing -

BUILDING COMPANY ABC (PTY) LTD

THE FEDERATED EMPLOYERS’ MUTUAL ASSURANCE COMPANY (RF) (PTY) LTD

PO BOX 1555WESTVILLE3630 30 January 2018

1ST FLOOR REWARDSCO BUILDING,2 NCONDO PLACE UMHLANGA RIDGE4001

PO BOX 1157 UMHLANGA ROCKS4320

(031) 277-0660(086) 719-6937

Physical address

Postal address

TelFax

30012018 152434

With reference to Section 84(1)(b) and Section 89 of the Act, we hereby certify that

BUILDING COMPANY ABC (PTY) LTD

has complied with the requirements of the above Act and, with the approval of the Compensation

Commissioner and Department of Labour, is at present registered and in good standing with The

Federated Employers' Mutual Assurance Company (RF) (Pty) Ltd.

Nature of Business:

LETTER OF GOOD STANDING

Policy Number: 123456

Compensation Fund CA Reference Number: 990000123456

12345D67 - 9B1A - 4F56 - 9ADE - 291DDC94AED8

Note: The Nature of Business is as per the Compensation Commissioner's approval and the subsequent applicable assessment rate.

The Federated Employers' Mutual Assurance Company (RF) (Pty) Ltd shall at their own discretion institute criminal proceedings against perpetrators who unlawfully alter or deface this letter with intent to defraud or misrepresent facts contained herein.

BUILDING CONTRACTOR - UNDER 12 METERS

This Policy also covers South African employee's outside of the borders of the Republic of South Africa

The code above can be used on the FEMwebsite(www.fema.co.za) to validate the Letter Of Good Standing

for continuous periods not exceeding 12 months.

Compensation Fund BP Reference Number: 2000712345

(Reg No.1936/008971/07) Directors: N F Maas (Chairman), J R Barrow, F G M Cardoso, A Daya*, J R T Headbush, M G Ilsley, K Imathiu, A P H Jammine

C S Jiyane, M A Letshele, G Mc Intosh*, K Moodley, H Ngakane, H Walker, (*Executive Directors) CEO: N F Manyonga, Company Secretary: E J Willis

Expiry Date: 31 May 2018

COMPENSATION FOR OCCUPATIONAL INJURIES & DISEASES ACT, 1993

Employer address

Policy number at FEMCompensation Fund reference numbers

Date of issue of letter

Department of Labour and Compensation Fund Logos

Nature of work carried out by employer

Date on which letter expires

Unique online verification number

FEM Address details

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8. Merit Rebates & Loadings

Merit Rebates If the accident record of an employer during a particular period is favourable, FEM may give the employer a rebate on any assessment paid or payable by the employer.Merit Rebates are paid each year at the discretion of FEM’s board in accordance with the FEM’s articles of association and are not guaranteed.

Increased Assessment Rates / LoadingsIf the accident record of an employer during a particular period is less favourable, and FEM is of the opinion that such state of affairs will probably continue, FEM may assess such employer at a higher rate of assessment than the gazetted tariffs.

How are Merit Rebates and Loadings calculated ?

premiums paid for the same period will determine the loss ratio. A favourable loss ratio could result in a Merit

loss ratio could result in a Loading (increase) of the standard rate.A favourable loss ratio is between 0% and 62%. To

between 0% and 10%. Between 63% and 64% there is no effect on Rebates or Loadings. From 65% and up the Loadings are applied.

When are Merit Rebates and Loadings applied? The calculated Merit Rebate or Loading will beapplied 2 years retrospectively.Loadings will only apply for a period of 1 year.

be in good standing by 30 June.

Loading starts from 1% up to a maximum of 365% of premium

Rebates reduce from 49% to 0% between 11% and 62% respectively

No rebate or loadings applied

50% rebate payable if loss ratio is under 10% of premium

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Claims

1. Income reimbursed by FEM at a rate of 75% as per COIDA.2. 3. 4.

maximums.5.

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1. list of private hospital groups.

2.

3. 4. Online submission of claims documentation to help speed up processing.5. 6. Recover costs from the Road Accident Fund, for Motor Vehicle accident claims, on the employers behalf.7.

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“The safety of the people shall be the highest law”

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How are employee wages calculated?

employees as part of their remuneration package.

commodation, reduced rates etc.

Company or Members of a Close Corporation.

sion etc.

tence and travel costs, lunches etc.

terms of The COID Act.

How does an employer qualify for a merit re-bate?

Merit rebates are calculated according to your claims cost against your total premium paid. Should

your claims cost be less than 10% of your premium,

claims cost increases, the merit rebate decreases.

What is the minimum premium?

The minimum premium, irrespective of the number of employees, is R2500 pa.

What happens if a subcontractor does not have Workmen’s Compensation cover?

Should a main contractor take on a subcontractor who is not covered for Workmen’s Compensation,

experienced by the subcontractor.

Can the letter of good standing (LOGs) be used for tender purposes?

FEM LOGs bears the Compensation Fund and Department of Labour logos and is accepted for all tender purposes.

What happens if an employer does not report an accident within 7 days to FEM?

will have to accompany the submission, with a reason as to why the incident was reported late.

13. FAQs

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13. FAQs

Where can poor service or fraudulent activi-ties be reported?

from FEM please report your experience on the complaints line, 24 hours a day, seven days a week. This

plaints line can also be used to report any fraudulent activities you may come across.

Toll free : 0800 007 705

Free fax : 0800 00 77 88

This is Independently managed by Deloitte Connect.

Are employees still covered if they work out-side of the borders of South Africa?

Employees are covered as long as their wages are declared in South Africa and the company is registered in the country. A list of employee names and ID numbers must be sent through to FEM to inform the company of the intention to work outside of the bor

country at least once every 12 months as per current tax legislation.All medical bills incurred outside of South Africa, will be compensated on acceptance of the claim at the

at the time of submission.

Are employees covered when they travel from home to work?

Travel from home to work is not covered under COIDA. Cover only commences once an employee enters the workplace to perform the duties they areemployed to do.There are only certain instances when an employee is covered when traveling to work, e.g. working away

Is an employee covered if they get injured performing duties, other than what they were employed for?

Employees will be covered, if they receive an instruction from their employer to perform any duty, other than what they were employed for. E.g. a driver who

covered.

Is the information provided to FEM safe?

FEM adheres closely to the Protection of Personal Information Act, 2013 or the POPI Act.Information will only be used to provide the compensation service and will not be used for marketing or

potential future claims, and all reasonable precaution will be taken to protect data. Information will only be forwarded to any third party for the provision of compensation services.

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14. Contact Information

011 3594300Johannesburg 011 3594399Cape town 021 4432200Durban 031 2770660 www.fem.co.za After hours claims contact 011 3594333

Claims documentation FEMregistry@fema.co.za

Claims enquiries enquiries@fema.co.za

Complaints FEMcomplaints@fema.co.za IT support support@fema.co.za

Marketing Marketing@fema.co.za

Online submission of documents / registration https://roe.fem.co.za

Underwriting backof

Charles.M.Hayes