Understand Additional Holiday Pay in the Motor Industry.

What is Additional Holiday Pay?

Additional Holiday Pay (AHP) is a bonus for Grade 7 and Grade 8 motor industry employees, set by MIBCO. It’s a required benefit based on hours worked. The rates update in September 2024. If you manage payroll for a motor industry company, compliance with this regulation is essential to avoid penalties.

Who Is It For?

Grade 7 and Grade 8 employees are the only ones who get Additional Holiday Pay. From September 2023 to August 2024, Grade 7 pay is R105.81 per week, and Grade 8 is R120.94. If you’re a motor industry employer, you must make sure these workers get the right amount every week—no exceptions. It's not just about a bonus; rules on hours worked, absences, and short-time decide if you owe AHP.

This benefit applies exclusively to Grade 7 and Grade 8 employees. As of September 2024, the rates have increased:

• Grade 7 Employees: R111.10 per week.

• Grade 8 Employees: R126.99 per week.

If a Grade 7 employee works full-time, add R111.10 to their weekly pay for holiday pay. Strict rules apply. If a Grade 7 or 8 employee works less than 23 hours a week. They don’t get AHP unless conditions like illness or short-time apply.

Grade 7 and Grade 8 employees in the motor industry differ by job duties, skills, and experience.

• Grade 7 Employees are semi-skilled workers. They often handle tasks that require basic technical knowledge or assistance under supervision. These jobs may involve some mechanical work, parts handling, or supportive roles within a motor workshop or dealership. Their responsibilities may not require advanced certification or in-depth mechanical skills but demand a foundational understanding of motor industry operations.

• Grade 8 Employees are skilled workers with technical expertise. They need formal training or apprenticeships. They handle tasks like servicing vehicles, making repairs, doing diagnostics, and checking quality. They work mostly on their own and solve problems with their skills.

Grade 8 employees have more specialized skills and responsibilities than Grade 7 employees. This difference affects their pay and benefits, like Additional Holiday Pay.

Managing extra holiday pay while staying MIBCO compliant can feel tough.

You might worry about getting the numbers wrong, missing deadlines, or not knowing how absenteeism affects pay. Mistakes can lead to fines, unhappy employees, and legal trouble.

Staying on top of AHP compliance will:

• Save Money: Avoid costly penalties and fines that result from missed or incorrect payments.

• Boost Employee Morale: Employees who receive their proper holiday pay are more likely to stay loyal and productive.

• Reduce Stress: With a proper system in place, payroll becomes predictable and hassle-free.

For example, when annual leave comes, employees get their AHP payments upfront. This means fewer complaints or disputes.

Here’s How It Works (Step-by-Step)

1. Identify Grade 7 & 8 Employees:

   Know which employees fall into these categories to ensure you're calculating correctly. Elleck Mgiba, a Grade 7 employee working 40 hours a week, is eligible for R111.10 per week as of September 2024.

2. Track Absences:

   Employees working less than 23 hours a week don't get AHP, except for illness, accidents, or short-time work. Ensure the employee works 23 hours or more to qualify for AHP in any given week.

   If they work fewer hours due to illness or accident (up to 30 days in a year), they still qualify. For example, John, a Grade 8 employee, is off for two weeks due to an accident. He gets R126.99 per week for those two weeks.

3. Calculate Based on Current Rates:

   • Grade 7 Employees: R111.10 per week.

   • Grade 8 Employees: R126.99 per week.

4. Send Payments Monthly:

   Pay the Regional Council by the 10th each month.

5. Adjust for Exceptions:

   If an employee is absent for a long time or leaves, change as needed. Special rules apply if an employee leaves the industry or takes annual leave. For example, AHP is payable when an employee takes leave or at the end of their job.

Here’s What I Want You to Do Next

• Review Your Payroll: Make sure your system is updated to reflect the current AHP rates.

• Set Reminders: Mark the 10th of each month as the deadline to send payments.

• Get help: If you're unsure about compliance, ask your payroll team or a MIBCO compliance expert to avoid mistakes.

Here’s Why It’s Smart

Implementing a system for managing Additional Holiday Pay protects your business from penalties and strengthens employee relations. It ensures your business runs smoothly and keeps your team happy.

If an employee questions their holiday pay, you can refer to your clear system that tracks hours and payments to resolve the issue.

Recap

• Problem: Mismanaging AHP for Grade 7 and 8 employees can result in fines and employee dissatisfaction.

• Benefits: Proper compliance means avoiding penalties, boosting employee morale, and simplifying payroll.

• Steps: Identify employees, calculate AHP based on weekly rates, track absences, and send payments monthly.

Here's a Solution For You

Stay ahead in the motor industry by mastering compliance. When you're in line with MIBCO regulations, run smooth payroll and handle HR compliance effectively. Your business grows with confidence.

At Three One Solutions, we simplify this process for you. You choose how: hire us to do it for you, work with us to do it together, or learn how to do it yourself.

Whatever your need, we ensure you're fully compliant and ready to focus on building your business. Explore our compliance management services, book a consultation, or sign up for our online courses and workshops. Let’s get your business compliant and thriving!