Assess whether section 197 applies
Determine whether a business or service is being transferred as a going concern. If section 197 applies, document the treatment of employment contracts, continuity, accrued rights and liabilities. A change of service provider alone is not enough to assume that it does.
Review temporary employment service and client responsibilities
Check whether the arrangement is a temporary employment service and whether sections 198 and 198A apply. The statutory protections depend on the worker and arrangement, including the applicable earnings threshold and temporary-service rules. Confirm responsibility rather than accepting a blanket provider liability promise.
Assess contractor status from the relationship
Review control, integration and economic dependence under the applicable employment-law test, alongside SARS employees-tax treatment. Contract wording alone does not settle employment status. Record the assessment and investigate past periods separately from future onboarding.
Confirm PAYE, UIF and SDL readiness
Check which registrations and contributions apply to the receiving employer, including PAYE, UIF and SDL. Allocate final deductions, returns and reconciliations, and update registered particulars when needed. Use the relevant exemptions and rules rather than one assumed contribution package.
Map employment terms and applicable sector rules
Identify the relevant bargaining council, collective agreement and basic employment conditions. Reconcile pay, leave and benefit commitments before documenting the new arrangement. Where a TES is involved, check client exposure for applicable employment-standard breaches.
Review visa conditions and employer undertakings
For sponsored foreign nationals, check the visa category, named employer and any change-of-condition process before setting a transfer date. DHA's general-work-visa requirements include employer undertakings and notification when employment or the role changes.
Where PEO fits
Ask what the proposed PEO or EOR service is under South African law. Temporary employment services and deemed-employer provisions can affect the client's responsibilities; do not import a US co-employment assumption.
Common questions
Does changing service provider automatically trigger section 197?
No. Determine whether a business or service is being transferred as a going concern. If section 197 applies, document employment contracts, continuity, accrued rights and liabilities; a provider change alone is not enough to assume it applies.
Does a temporary employment service take all responsibility from the client?
Do not rely on a blanket liability promise. Check whether sections 198 and 198A apply to the worker and arrangement, including the relevant earnings threshold and temporary-service rules, and confirm the client’s responsibilities.
Which payroll registrations should the receiving employer check?
Check which PAYE, UIF and SDL registrations and contributions apply, including relevant exemptions. Allocate final deductions, returns and reconciliations, and update registered particulars where needed; do not assume one contribution package fits every arrangement.
Turn these checks into a plan
Record an owner, required evidence and readiness date for each issue. Confirm the rules for the actual employing relationship and work location before promising a cutover.
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