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Calculate sick leave pay correctly and avoid the CCMA

by , 25 September 2013
You might think you're calculating the sick leave pay for your staff correctly. But are you 100% sure your calculations are right? If they aren't, an employee could take you to the CCMA if he finds fault with your processes.

Let's look at exactly how to work out your employee's sick leave pay correctly.
 
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Three absenteeism excuses you can penalise employees for
Excuse#1: 'I went to the clinic, but they were too busy to give me a sick note. I wasn't feeling well and I didn't want to wait for nurse to write a note.'
 
Excuse#2: 'I ran out of airtime and I couldn't buy any because I didn't have money.'

Excuse#3: 'I had to attend my aunt's cousin's daughter's wedding ceremony in Rustenburg. I only found out about it at the last minute.'

You've most probably heard these excuses, and many more, one too many times… Find out how to reject these excuses today.
 
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The first step to make sure you calculate sick leave pay correctly
 
Firstly, you need to make sure you allocate sick leave correctly. An employee's sick leave cycle runs for 36 months while he's with the same employer, or after his previous sick leave cycle's finished.
 
Work out his sick leave days in line with the number of days he usually works in a six-week period. This is normally 30 days in in the three year cycle.
 
But during his first six months of employment, he's only entitled to one day of sick leave for every 26 days worked. 
 
On the first working day of month seven, the balance of the 30 days is available to him. Minus any sick leave days he took during the first six months of employment. This is in line with the Basic Conditions of Employment Act.
 
At the end of every leave cycle, he'll forfeit any sick days he hasn't taken and the next cycle begins with a fresh balance.
 
The next step is to calculate the amount...

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In 2013 you will contribute to R19 billion spent in sick leave
 
Sounds impossible, I know. I didn't believe it either. But R19 billion is what sick leave costs South African companies a year. This is equal to the amount medical aids paid to suppliers in 2010.
 
And did you know R57million of that is from employees taking 'sick days' off purely because they just didn't feel like coming in to work?
 
Stop your employees abusing sick leave today! Our 27 experts will show you how
 
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Step 2: How much sick leave pay do you give a sick employee?
 
You need to work out the amount you pay the employee as follows:
1. Start with the employee's monthly salary, his cost-to-company. Include any subsidies or allowances you pay him. If you pay any of these seven amounts to an employee, make sure you include them in this calculation:
  1. Housing or accommodation allowances or subsidies;
  2. Housing or accommodation received as a benefit in kind;
  3. Car allowances or if you give him a car. But only if his car enables him to work;
  4. Any cash payments made to him;
  5. Any other payment in kind you give him; 
  6. Your contribution to medical aid, pension, provident fund or similar schemes; and
  7. Your contributions to funeral or death-benefit schemes.
For example
Your employee, Jane, earns a monthly remuneration of R27 000. Included in this amount is her monthly salary (R24 000), as well as a car allowance of R3 000.
 
2. Divide the total monthly salary by the number of working days in the month the employee was sick.
Example
Jane is sick for two days in June 2012. There were 20 working days in June.
 
3. You'll get a daily amount. This is how much to pay the employee for each day she's sick.
Example
Divide Jane's salary by the 20 working days in June to get the final daily leave pay figure. That's R27 000/20 = R1 350
 
Need to know how to manage sick leave from A-Z? Click here now to get your hands on a copy of the Ultimate Guide to Sick Leave.
 
Until next time,
 
Taryn

P.S Do you have a question on sick leave? Why not go to www.labourandhrclub.co.za and register to get an answer to your question today!
 

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