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A Letter of Good Standing is an official certificate confirming that an employer is registered for COIDA (the Compensation for Occupational Injuries and Diseases Act) and that its assessment payments are up to date. Many clients, tenders and principal contractors require it before they will work with a business. This guide explains what it is, why employers need one, and how to obtain it.
In short: A Letter of Good Standing confirms that an employer is registered for COIDA and that its assessments are paid up to date. Clients, tenders and principal contractors often require one. To obtain it, register with the Compensation Fund, submit your return of earnings, pay your assessment and generate the letter through ROE Online, or obtain it from RMA or FEM if you are insured with them.
What is a Letter of Good Standing?
A Letter of Good Standing is a document issued by the Compensation Fund confirming that the employer is compliant with the requirements of the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA), as amended. It confirms that the employer is in good standing with the Compensation Fund and that there are no outstanding payments.
Why do employers need a Letter of Good Standing?
The letter shows that the employer is complying with COIDA, under which employees, or their dependants, claim compensation for work-related injuries and diseases from the Compensation Fund.
A Letter of Good Standing is also important when a business applies for a tender or contract, as it serves as proof that your employees are covered by COID should a work-related injury or disease occur.
Need a Letter of Good Standing for a tender or contract? Speak to a SEESA Specialist.
How to get a Letter of Good Standing
Step 1: Register as an employer
If you are an employer with employees, you must be registered with COID.
Registration can be done on the Department of Employment and Labour’s website or submitted manually at COID.
When the registration is finalised, the employer will receive a Compensation Fund reference number.
Step 2: Submit your Return of Earnings (ROE)
Every year, an employer must submit a Return of Earnings to COID.
By submitting ROEs, the employer declares the amounts paid towards remuneration for the financial year (Actual Earnings). The employer must also estimate what will be paid towards remuneration for the following financial year (Provisional Earnings).
COID then calculates the amount payable based on the employer’s nature of business and the amounts indicated on the ROE.
Step 3: Pay your assessment
After submitting the ROE, the Compensation Fund will provide the employer with an invoice / notice of assessment showing the total amount that must be settled. Once payment reflects on the Fund’s system, the employer can generate the Letter of Good Standing through ROE Online. The validity dates appear on the letter.
If the employer cannot pay the total outstanding amount at once, an instalment plan with COID can be considered.
How can SEESA help?
SEESA supports South African employers with COIDA registration, returns of earnings and Letters of Good Standing through its UIF & Compensation Fund services.
Speak to a SEESA Specialist about COIDA registration and your Letter of Good Standing.
Frequently Asked Questions
A Letter of Good Standing is an official certificate confirming that an employer’s COIDA account is registered and its assessments are paid up to date. For Compensation Fund employers, this also requires returns of earnings to be up to date and applicable penalties and interest to be settled.
It is widely required before a business can be awarded tenders or work for clients and principal contractors, and it demonstrates COIDA compliance. Typical uses include tender submissions, contractor onboarding and site access, depending on the tender or contract requirements.
It is issued by the Compensation Fund, under the Department of Employment and Labour. Compensation Fund employers obtain it through the Fund’s ROE Online services. Employers insured through Rand Mutual Assurance (RMA) or FEM obtain their letters from those associations instead.
Broadly, an employer must be registered for COIDA, submit the required return of earnings, and have assessment payments up to date before the letter can be issued. Register with the Compensation Fund, submit outstanding returns, settle assessments and applicable charges, then generate the letter through ROE Online. Any audit blocks or unallocated payments must first be resolved. Approved payment arrangements may allow letters subject to the Fund’s conditions.
The letter is valid for a set period and must be renewed. The exact validity dates appear on the letter. Letters may be issued annually or monthly, depending on the issuing body and payment arrangements; do not assume validity is 12 months from issue.
COIDA registration sets up the employer’s account; the Letter of Good Standing confirms that account is active and payments are current. Registration alone does not establish good standing: required returns of earnings and payments must also be up to date.
This article provides general information and does not constitute legal advice. Requirements may differ according to the employer’s industry, collective agreements and circumstances.
About the author:
Michelle du Preez, UIF & COID Legal Advisor (LLB)