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A Letter of Good Standing is an official letter that proves you are COIDA registered and up-to-date with your payments to the Compensation Fund.
For more info on COIDA Letter of Good Standing, view some of the main questions most business owners ask below.
The reason why Tenders and Contracts so often require you to have a COIDA Letter of Good Standing is simply to make sure you’re taking full responsibility of your employees and to make sure you’re authorized to operate legally.
If you’re not COIDA registered or you’re not in good standing with the Compensation Fund, your employees aren’t covered by the Compensation Fund in the case of any work-related accidents in terms of medical expenses or compensation in the case of permanent injury or death.
No, a business must be registered with the Compensation Fund before a letter of good standing can be obtained.
A COIDA certifcate and a COIDA Letter of Good Standing is one and the same, and refers to the same document from the department of labour.
Lets refresh our minds of how we can acquire a COIDA letter of good standing.
Once an employer has successfully registered with COIDA, they will receive a CF registration number from the Department of Labour, which serves as their unique identifier within the COID system.
This number is essential for various purposes, including submitting Return of Earnings (ROE) forms and making contributions to the Compensation Fund.
Once the employer has succesfully submitted their Return of Earnings and made the required payments as set out in the Assessment fees, a Letter of Good Standing at COID can be requested.
In very simple terms you can see the annual COIDA assessment fees as your business “insurance premium” should any of your staff be injured whilst on duty.
COIDA assessment fees are contributions that employers are required to make to the Compensation Fund based on the nature of their business operations and the associated risks. These fees help to fund the Compensation Fund, which provides compensation to workers who are injured or contract occupational diseases as a result of their work.
The assessment fee for each employer is calculated using the following formula:
Assessment fee = total workers’ pay ÷ 100 x assessment tariff
What this means:
Total workers’ pay is the total annual payroll of all employees of the employer which has been listed on the Return of Earnings.
Assessment tariff is the rate at which the employer is required to contribute to the Compensation Fund, based on the industry and risk category of their business. A construction business will have a higher risk factor compared to a normal office based business, as an example.
What factors affect the assessment tariff?
The assessment tariff is determined by the following factors:
A person or organization in good standing is regarded as having complied with all their explicit obligations.
Here are the prerequisites, as an employer or business owner, to getting a COIDA Letter of Good Standing – and the correlating legislation:
Yes, you must register all of your employees for COIDA, regardless of whether they are casual or permanent staff. The Compensation for Occupational Injuries and Diseases Act (COIDA) states that all employers who employ one or more employees must register with the Compensation Fund. This includes casual workers, temporary workers, and contractors.
There are a number of reasons why you should register all of your employees for COIDA irrespective of the legal requirements:
To register your employees for COIDA, you will need to complete a COIDA registration form (WC2 form) and submit it to the Compensation Fund. If you want more information on the process you can read more about COIDA Registration here.