Traditionally domestic and garden workers have found themselves working for many years, in many instances for the same employer, but without enjoying any meaningful benefits at the end of their working life. The harsh reality for many domestic workers is that when they go back home, very often all they have to show are some clothes, groceries, perhaps a small bonus and fond memories of the family they lived with.
It is because of problems such as these that Government developed legislation aimed at protecting the home employee. The sectoral determination for domestic workers focuses on the working conditions of home employees dealing with issues of wages, working hours and deductions. It is a legal requirement for domestic employers to make provision for the retirement of their employees.
Employers may deduct from the wages of their employees a certain portion for this requirement. Due to the fact that such benefits have historically only been possible with big corporates, some financial institutions have come up with Provident Fund plans to assist home employers in contributing towards retirement plans for their employees. Some of these plans are packaged to include withdrawal, death and funeral benefits. These plans can be extended to include employees of body corporates, churches, farm workers and other small businesses. The benefit with such products is that the institutions with which the accounts are held take care of the administration and management of the transfer of the money and in the process taking a load off the shoulders of their clients, who might not have the required time or expertise. In cases where the fund selected is registered in accordance with the provisions of the Pensions Fund Act, which is preferable, members may only access the fund on agreed occurrences such as resignation, retrenchment, transfer and retirement.
The institution where the account is held will require the employer’s banking details in order to set up a debit order agreement. The domestic employee’s details may be required in the case where the employer wishes for the salary to be disbursed electronically.
Members of Provident Funds may withdraw from the fund, allowing them not to lose out when they change employment. It remains however in the clients’ best interest to offer them financial advice when they terminate employment from their existing employers and to encourage them to continue their investment towards a retirement plan.
The financial stability of your domestic worker has a myriad of benefits for you, your family and your employee. In assisting your domestic worker to secure their financial future you will build a relationship of trust and interdependence.
*Used with permission from Consumer Fair November – December 2007 edition