Section 34A obliges an employer that deducts amounts from an employee’s remuneration for payment to a benefit fund, to pay such amounts to the fund within seven days of the deduction being made. These provisions are designed to protect employees by ensuring that deducted or promised contributions reach the relevant benefit funds without delay. However, there has been much publicly around employers’ failure to discharge this duty. In previous Alerts we have dealt with such delinquency and the legal implications for defaulting employers. 

On 24 December 2003, the then Minister of Labour issued a section 50(1)(a) notice under the BCEA which excluded the application of section 34A to employers and employees in relation to benefit funds regulated under the Pension Funds Act 24 of 1956 (Pension Funds Act).

The effect of that notice was that:

Labour inspectors were unable to enforce the seven-day payment obligation in respect of retirement fund contributions.

As a result, enforcement of contribution delays fell outside the scope of the BCEA for more than two decades. This exemption created a significant enforcement gap for the Department of Employment and Labour, leaving employees exposed to employers who deducted contributions but failed to transfer them to the appropriate funds.

On 13 January 2026, the Minister of Employment and Labour however, issued a section 50(9)(a) notice withdrawing the 2003 exclusion. This marks a significant regulatory shift. With immediate effect, section 34A of the BCEA now also applies also to benefit funds governed by the Pension Funds Act. Labour inspectors are empowered to verify whether employers have paid contributions into the correct funds, request proof of payment and contribution schedules, and take enforcement action where there is non-compliance.

Practical implications for employers

Employers should review their payroll and contribution processes to ensure compliance. In particular, employers must ensure that Employer contributions are paid within seven days of the end of the applicable pay period. Section 34A of the BCEA however imposes a different trigger date of the seven days compared to the trigger date under section 13A(3) of the PFA.  These need to be considered by employers.

Employers should be aware that they are now subject to dual enforcement for non-payment of benefit fund contributions. Under section 34A of the BCEA Labour Inspectors can issue compliance orders and impose administrative penalties. Under the Pension Funds Act: Non-payment is a criminal offence punishable by a fine of up to R10 million, imprisonment for up to 10 years, or both in terms of section 37(1)(c). Also, directors can be held personally liable under section 13A(8).