What is an employer of record in South Africa?

An employer of record in South Africa – or South Africa EOR – works with a client to help them find, hire, and administer local staff, who report directly to the client as if they were working directly for them. Note that a South Africa employer of record can also be known as a professional employer organization (PEO). A South Africa employer of record will therefore take care of payroll, benefits, compensation, unemployment claims, oversight of statutory leave, and many of the other complicated aspects of managing staff anywhere. Such a service comes with a fee – generally on a monthly per-employee basis. While that will usually be significantly less than the costs associated with establishing and managing a local entity, even in the absence of significant financial savings, such an arrangement comes with the benefits of being much more convenient and allowing market entry to be completed rapidly. It also comes with significantly less risk, with a good employer of record in South Africa guaranteeing compliance with all local regulations and norms as part of any service agreement they offer. Moreover, an employer of record in South Africa will have expert local knowledge that the client can tap into, potentially helping when it comes to selecting local partners or providers to work with. Should moving into South Africa be the first step on a trajectory that involves expanding into other markets, working with a provider that has a presence or connections elsewhere is likely a good choice. Because when the time comes to expand further, you will be able to rely on them to provide the support you need there, too.

Employment regulations a South Africa EOR will oversee

Among the employment regulations that your employer of record in South Africa will comply with are the following: Maximum hours: In South Africa, the maximum working week is 45 hours long, based on a five-day week of nine hours per day (excluding lunch break), or eight hours per day for a longer week. No employee is obliged to work longer than 45 hours peer week. Overtime: Under South African law, overtime is voluntary and must be agreed between the employer and the employee. Your South Africa EOR will also have to oversee that overtime maximums of three hours of daily and 10 hours weekly are complied with, while any overtime performed must be paid at 1.5 times the standard rate. On Sundays and public holidays, that rises to twice the standard rate. Minimum wage: As of 2022, the minimum hourly rate for employees stood at 23.19 South African rand (approximately US $1.40 at time of publication), which your employer of record in South Africa will enforce. Employment contracts: Under South African law, a written contract must be provided to an employee no later than their first day of full employment. Certain specifics about the job must be included within the contract – something that a South Africa employer of record will be able to handle. Paid leave: In South Africa, employees are entitled to 21 consecutive days of leave during every 12 month “leave cycle,” of which the first commences from the moment of employment. At the end of a leave cycle, a new one commences, and that allowance is restored. The period of annual leave must be agreed between the employer and the employee.