iLEMBE DISTRICT MUNICIPALITY (“the Municipality”)
PAYROLL POLICY
Contents
1. Purpose ... 3
2. Scope ... 3
3. Definitions ... 3
4. Principles ... 3
5. Policy Provisions ... 4
6. Procedures ... 5
7. Payment of Remuneration ... 8
8. Delegation ... 8
1. Purpose
1.1 The purpose of this policy is to guide iLembe District Municipality in the administration of salaries and allowances, payroll schedules, payment methods as well as payment intervals to ensure accurate and timely payment of salaries and allowances.
2. Scope
This policy will apply to all employees of iLembe District Municipality save for the Municipal Manager and Managers reporting directly to the Municipal Manager in terms of sections 56 and 57 of the Municipal Systems Act of 2000 and Councillors in terms of the Remuneration of Public Office Bearers Act, 1998 (Act No. 201 of 1998) as well as the annual Government Notices on the Determination of Upper Limits of Salaries, Allowances and Benefits of Different Members of Municipal Councils as issued by the Department of Co-operative Governance and Traditional Affairs (CoGTA).
3. Definitions
3.1 The following definitions will apply in this policy:
3.1.1 Base or basic pay is the amount of pay that constitutes the rate for the job. It refers to the cash component of monthly remuneration without benefits and prerequisites.
3.1.2 Total cost of employment refers to a combination of base pay and employee benefits.
3.1.3 Employment benefits include pension, leave, travel allowance, housing allowance, cell phone allowance, medical aid etc.
3.1.4 Performance management processes define individual performance and contribution expectations; assess performance against those expectations; provide regular constructive feedback; and result in agreed plans for performance improvement, learning and personal development.
4. Principles
4.1 The following principles underpin this payroll policy:
4.1.1 The payroll policy and practice will support the attainment of the Municipality’s strategic objectives.
4.1.2 Payment of operational allowances will be paid in terms of the respective individual policies as listed but not limited to the following:
4.1.2.1 Overtime Policy
4.1.2.2 Subsistence and Travel Policy 4.1.2.3 Shift Allowance Policy
4.1.2.4 Acting Allowance Policy 4.1.2.5 Leave Policy
4.1.2.6 National Treasury Internship Framework 4.1.2.7 Cellphone Policy
4.1.2.8 Subsidized Motor Vehicle Allowance Policy
4.1.3 The payroll policy will be influenced by affordability and sustainability factors.
5. Policy Provisions
5.1 The Municipality will remunerate its employee’s fair and competitive salaries, taking into cognisance prevailing Salary and Wage Collective Agreement and SALGBC Conditions of Service Collective Agreement.
5.2 The Municipality will reward its employee’s equal pay for similar work and will not discriminate based on gender or age.
5.3 Competence will be used to determine the level of remuneration, as guided by the municipality’s performance management policy as and when applicable and adopted.
5.4 Remuneration levels will take cognisance of both internal equity and external competitiveness 5.5 Councillors, senior managerial employees and other contracted employees will be paid on a
total cost of employment basis and will be allowed to structure their packages (within limits of the law) to suit their individual needs.
5.6 Remuneration levels of section 56 and 57, i.e. Municipal Manager and Senior Managers, will be guided by, and adhere to Local Government: Regulations on Appointment and Conditions of Employment of Senior Managers in conjunction with annual Government Notices on the
Total Remuneration Packages Payable to Municipal Managers and Managers directly accountable to Municipal Managers.
5.7 Remuneration of Councillors will be guided by, and adhere to the Remuneration of Public Office Bearers Act, 1998 (Act No. 201 of 1998) as well as the annual Government Notices on the Determination of Upper Limits of Salaries, Allowances and Benefits of Different Members of Municipal Councils as issued by the Department of Co-operative Governance and Traditional Affairs (CoGTA) from time to time.
5.8 Where neither the Remuneration of Public Office Bearers Act nor the Regulations on the Appointment and Conditions of Employment of Senior Managers is silent on how to administer a particular payroll aspect, the provisions of this policy will take precedence.
5.9 Confidentiality will be observed in all matters relating to individual salaries.
6. Procedures
6.1 Job Evaluation and Grading
6.1.1 The content of all jobs will be properly described and evaluated in terms of the agreed job evaluation system. The Municipality currently uses the Task job evaluation system.
6.1.2 Jobs will be linked to the pay structure in accordance with the provisions of the applicable legal framework.
6.1.3 Pay levels in the structure will be influenced by market rates as determined by market surveys.
6.1.4 All new jobs, or jobs whose responsibilities have changed, will be subjected to the Job Evaluation process for evaluation.
6.2
Base or Basic Pay
6.2.1 Base or basic pay will be determined by internal (as measured by job evaluation) and external (as measured by tracking market rates) considerations.
6.2.2 Base or basic pay will also be determined in accordance with national collective agreements.
6.3
Total Cost of Employment
6.3.1 The Municipality will pay a total package (total cost of employment) for Councillors and all positions designated and occupied by senior managerial employees and contractual employees.
6.3.1.1 Total Cost of Employment (TCOE) includes:
Basic Salary
Employer’s contribution to retirement fund
Employer’s contribution to medical aid
Housing subsidy
Car allowance
Annual bonus
All allowances not defined as operational allowances
6.3.1.2 TCOE will be split as per the employees request and applies to Section 56 and 57 employees
6.3.1.3 TCOE is paid in 12 monthly instalments
6.3.1.4 Qualifying employees will be allowed flexibility to structure their TCOE packages to suit their needs within the parameters of the Income Tax Act, the Municipality’s policies and relevant collective agreements
6.3.2 The Municipality will pay a salary plus benefits for all other positions
6.4 Reward Mix
6.4.1 The reward mix for all employees will be made up of guaranteed pay and benefits
6.4.2 Guaranteed pay includes all guaranteed items such as basic salary, car allowance (perk), medical aid, pension and guaranteed allowances (legislated and non-legislated)
6.4.3 Guaranteed pay for an individual will be based on their level of responsibility in the organization and the size of their job, as determined by the job evaluation process.
6.4.4 Benefits will be provided in accordance with national collective agreements as well as the Municipality’s conditions of service and human resource policies.
6.5
Commencing Salaries
6.5.1 New employees, and employees that have been promoted, will be placed at the entry level of the pay scale/notch for that particular job grade.
6.5.2 Where there is a justifiable reason for a higher notch, the Head of Department will motivate for approval by the Municipal Manager.
6.6
Annual Cost of Living Adjustment (COLA)
6.6.1 COLA for Councillors will be determined on the basis of the annual Government Notices on the Determination of Upper Limits of Salaries, Allowances and Benefits of Different Members of Municipal Councils as issued by the Department of Co-operative Governance and Traditional Affairs (CoGTA) from time to time
6.6.2 Remuneration for all employees falling within the ambit of bargaining council will be adjusted annually by means of a cost-of-living adjustment as determined through the collective bargaining processes in the South African Local Government Bargaining Council (SALGBC).
6.6.3 COLA for Senior Managerial employees will be determined on the basis of annual Government Notices on the Total Remuneration Packages Payable to Municipal Managers and Managers directly accountable to Municipal Managers.
6.6.4 COLA for other employees will be based on the basic salary, with benefits being adjusted according to municipal policy and collective agreements
6.6.5 The CFO will ensure that provision for annual adjustments is made in the budget
6.7
Performance Rewards
6.7.1 Senior Managerial employees qualifying to receive performance rewards (bonus) will be paid in accordance and within the performance management framework after all due processes have been adhered to. These include the requisite performance appraisals and obtaining the relevant Council Resolutions.
6.7.2 Employees falling within the ambit of SALGBC will be eligible for an annual bonus (13th cheque) payable in every November but depending on the affordability by the Municipality.
6.8
Operational Allowances
6.8.1 The following are deemed to be operational allowances:
Standby allowance
Shift allowance
Cell Phone allowance
7. Payment of Monthly Remuneration
7.1 All payroll inputs from various departments should be submitted on or before the 10th of each month to allow payroll staff to process them in time so that any errors are detected early during the salary trial run. No late payroll inputs shall be considered unless approval is sought from the Chief Financial Officer (CFO) or Senior Official designated by the CFO.
7.2 Salaries are payable on the 25th of each month.
7.3 Where the 25th falls on a weekend or a public holiday, salaries will be paid on a business day immediately before the weekend or public holidays.
7.4 Where the 25th falls on a Monday, salaries will be paid on a business day immediately before the weekend or public holiday.
7.5 December salaries will be paid on a Friday before the week in which December 25 and 26 public holidays fall.
7.6 No salary related payment shall be made outside the dates stipulated under 7.2 to 7.5 unless approval is sought from the Chief Financial Officer (CFO) or Senior Official designated by the CFO.
7.7 All claims for subsistence in respect of the preceding month, must be submitted within a month of the succeeding month; for example, claims in respect of January must be submitted during February. Failure to comply will result in the claim not being honoured unless written reasons are furnished to justify the non-compliance, which must be acceptable to the responsible Manager/supervisor.
7.8 Payroll third party creditors shall be paid on or before the last day of the month during which salaries relate in respect of medical aids and on or before 7th of the following month in respect of employee taxes, pension contributions as well as other statutory payments and garnishees.
7.9 Every Councillor or employee shall have amounts payable to him/her in respect of salary and all other payments deposited to a personal account at any branch of a banking institution as he/she may nominate. In the event of death of a respective Councillor or employee, any outstanding monies shall be paid to personal bank account of a nominated beneficiary or dully appointed executor of estate.
8. Other Matters
8.1 Voluntary deductions such as in respect of personal insurance premiums, external loans, etc.
will not be administered through payroll. Employees are encouraged to arrange debit orders and stop order facilities through their banking institutions for these. Where current arrangements are cancelled, renewals will not be allowed through the payroll system. Current arrangements will be allowed for a period of 6 months to a year for employees to transfer such to their banking institutions.
8.2 All voluntary deductions in place will attract a minimum of 2.5% commission to be deducted by the Municipality from the respective institutions in order to cover basic administration and/or handling fees.
8.3 Councillors and employees are entitled to receive free copies of payslip (on a monthly basis) and IRP5 / Tax Certificates (on an annual basis). R1.50 will be charged for any requests to reprint these documents if there is no evidence that these were not issued in the first place.
Such will be deducted off the salary in the succeeding month.
8.4 Any changes to pension and medical aid arrangements, e.g. new intakes, adding or removing dependents and/or terminations should be done through the Human Resources Unit (Staff Benefits Office).
8.5 Employees joining the Municipality as well as those terminating their services will be subject to a five (5) days salary withheld which will be released on the last day of the month subject to the following:
8.5.1 In the case of new employees proof that they indeed worked the whole month;
8.5.2 In the case of employees terminating their services, proof that they indeed worked the whole month as well as evidence that all municipal tools of trade have been returned as well as evidence that no monies are owing to the Municipality.
8.6 All salary related queries will be attended to by the payroll staff every Tuesday and Thursday except for the week during which salaries are being paid. All queries should be raised, be attended to and be finalized by no later than a week during which salaries are being paid.
8.7 All confidential payroll related information should be requested by only authorised personnel and shall be released upon approval granted by the Chief Financial Officer (CFO) or Senior Official designated by the CFO.
9. Delegations
Officials, implementing this policy, are required to make reference to the latest delegation framework and identify the appropriate delegations applicable to this policy, which may be subject to change from time to time.
10. POLICY ADOPTION
This policy has been considered and approved by the Council of the iLembe District Municipality on this day ………..2021.
