STATUTORY OBLIGATIONS FOR EMPLOYERS AFTER COMING INTO FORCE OF WORKERS COMPENSATION ACT.

The Workers Compensation Act, 2008 that came into operation on 1st July 2015 was established to provide compensation for employees injured or incapacitated in the course of their employment. The Act applies to all employers both in the Private and Public sector that have been stationed or operating in Tanzania for more than twelve (12) Months.
Under the new legislation all employers are required to contribute to the Workers’ Compensation Fund (WCF), whereas employers in the private sector are required to contribute 1% and the public sector 0.5% of their annual wage bill from 1st July 2015 and the contributions are due on monthly basis.

The Act imposes the following obligations to employers:

• To register with the Director General of the Workers’ Compensation Fund (WCF) within the prescribed period. Where an employer enters into an agreement with a contractor for the provision of services, the contractor is obliged to register as an employer and pay the necessary contributions for his employees, if the contractor fails to register as an employer, the employer who contracted him will be deemed liable for the assessment of the contractor’s employees and in turn will pay the necessary assessment fees;
• To keep a register and other records of earnings for a period of not less than three years;
• To submit to WCF a return of earnings at each workplace by 31st March following the calendar year in question;
• To provide and finance the transport of employees from the place of any accident to a hospital, and eventually to the employee’s residence regardless of whether the employer believes the accident or illness was caused in the course of employment;
• To pay the employee compensation within one month of any such accident or occupational illness and;
• To inform employees of their rights under this Act, and to display a clearly visible notice at the place of work.

Any employer who fails to comply with these requirements will be committing an offence and be liable to fines and/or imprisonment.

NMB PLC
Account Name: Workers Compensation Fund
Account Number: 20110016403
Branch: NMB Bank House Branch, Dar es Salaam

CRDB Bank PLC
Account Name: Workers Compensation Fund
Account Number: 0150237547300
Branch: Holland House Branch, Dar es Salaam

Together with proof of payment, the form WCP-1 has to be submitted to the WCF to support the contributions paid. The form can be downloaded from the website of the Ministry of Labour and Employment.

Conclusion and Recommendations

Ensure your company is registered and follow all the obligations as an employer. Please take note that these contributions are employer’s cost and these costs should not be deducted from the salaries of employees. All Companies should:

• Review current payroll to ensure WCF payments are adjusted correctly to account for the increased mandatory employer contributions and;
• Review assignment budgeting processes for forecasted assignments, in addition to an analysis of the costs of active assignments in Tanzania.

FURTHER INFORMATION:

This editorial is intended to give you a general over view of the Law. If you would like further information on any issue raised in this column, please contact.Patrick Sanga
Partner
E: p.sanga@vemmaattorneys.co.tz
M: +255 686 999 993Haika-Belinda Macha
Partner
E: hb.macha@vemmaattorneys.co.tz
M: +255 688 305 999