I am a small business owner

Legislation is in place for specific reasons and being compliant is essential for all businesses no matter how big or small. Complying with legislation is important and should you fail to comply with  legislation for a business you could end up in some hot water, be fined and even get jail time.

According to the National Small Business Amendment Act 2004, small business is defined as businesses with five or fewer employees and a turnover of up to R 100 000.00 per annum.  The definition does not make provision for – and neither does it differentiate between – formally registered businesses or sole proprietors, it only mentions the turnover and the employee totals (taking into consideration as a sole proprietor you are an employee in your business).

Now that we have established that, if you earn R8 333.34 per month from your small business – you are a small business owner (or sole proprietor) and there will be certain compliance laws which you will have to adhere to.

For purposes of this blog, I want to focus on any Human Resources related compliance.

If you are a Sole Prop – read on … if you have a small business with an employee or two, scroll down to Point B.

A. Let’s start with you are a sole proprietor, you do not have any employees other than yourself in the business, what should you have in-place to comply with current legislation?

1.       Workman’s Compensation (COID). Did you know that as sole prop in the event that something happens to you while on duty, you can claim from Workman’s compensation in addition to whatever insurance you have in place? And this does include should you test positive for COVID.

2.       Going hand in hand with your COID registration is also a health and safety manual which will not only protect yourself but also your clients, should any unsafe situation occur.

3.       Pay slips – Yes, I know you probably earn so little, that it will not even make a difference. But by having a pay slip and ensuring that you are registered for UIF as well as the necessary tax legislations, you will make your financial year-end a breeze.   

4.       POPIA –  As a sole proprietor, you might be keeping information of clients, and or suppliers. The Protection of Personal Information Act is set-up to ensure that all information being kept by any-one is done in a secure manner. Your clients (whether you are big or small) will feel more safe and secure knowing that you are making an effort to protect their information. And other than this, the legal requirement is that even a sole proprietor must have a Privacy Policy and the necessary documentation to support this policy.

5.       PAIA – All businesses (including sole proprietors) have to have a manual which explains to your clients, and suppliers how they can get access to the records which you keep. This will support your POPI Policy and will also ensure transparency with-in your business, to show your clients and suppliers that you will not just hand over information to any-one.

B.  In the event that you are a small business with one or more employees here is what you will need to have in place:

1.       Workman’s Compensation (COID) – As soon as your company employees its first employee, you compelled to register for COIDA. COIDA provides a system of no-fault compensation for employees injured or who contract diseases during the course of their employment. This will save you from having to pay any compensation should your employee be hurt or contract a disease whilst on duty.

2.       Going hand in hand with your COID registration is also a health and safety manual which will not only protect yourself and your employees but also your clients, should any unsafe situation occur.

3.       UIF – Register for UIF with the Department of Employment and Labour, as soon as you make your first payment based on a salary.

4.       Pay slips –  Ensure that you keep record of all payments to employees. Make all the necessary payments to UIF and PAYE and that you have proper record keeping of this.

5.       Contract of Employment –  Whether you have 1 employee or 5 it is imperative that you have a contract of employment in place with your employee.

6.       Going with the employment contract is a Disciplinary code (to ensure that the employee will know what acceptable conduct is and what not) as well as a set of rules, policies and procedures. An employee cannot be disciplined for breaking rules which they do not know of.

7.       POPIA – You might not be keeping a lot of information of clients, and or suppliers. You will be keeping some form of information especially that of your employees. The Protection of Personal Information Act is set-up to ensure that all information being kept by any-one is done in a secure manner. Your clients (whether you are big or small) will feel more safe and secure knowing that you are making an effort to protect their information. And other than this, the legal requirement is that even a sole proprietor must have a Privacy Policy and the necessary documentation to support this policy.

8.       PAIA – All businesses (including sole proprietors) have to have a manual which explains to your clients, and suppliers how they can get access to the records which you keep. This will support your POPI Policy and will also ensure transparency with-in your business, to show your clients and suppliers that you will not just hand over information to any-one.

Being a small business will not exclude you from regulations, but it does make the administration easier, especially if you use Rivers Labour Consultants to assist you in formalizing your Human Resources administration.

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