Both the Unemployment Insurance Act and the Unemployment Insurance Contributions Act clearly state that all workers are covered, with no reference to their nationality. The definition of employee in both Acts reads as follows: 

“employees means any natural person who receives any remuneration or two whom any remuneration accrues in respect of services rendered or to be rendered by that person, but excludes an independent contractor.” 

There is an exclusion of foreigners who enter SA in terms of a contract for the purpose of carrying out a contract or service if upon the termination of the contract the employer is required to repatriate that person, or if that person is required to leave SA. 

Therefore, any foreigner (legal or illegal) who works in SA is liable for UIF and is eligible for benefits, unless he or she is working under a contract referred to above. 

As a matter of interest, senior legal people at SARS (which is responsible for the Unemployment Insurance Contributions Act) agree with this interpretation, and insist that employers must deduct and pay UIF contributions in respect of such foreign employees. 


Ron Waren – Payroll World