Guard services not paying national insurance contributions for workers
By Miranda La Rose
July 28, 2002
Several professional guard services owe the National Insurance Scheme (NIS) in excess of $200 million in contributions, which were deducted from their employees’ wages and salaries but not paid into the NIS.
The NIS has also noted a new development in which some companies hire workers, but leave them to pay their contributions as self-employed persons when in fact they are not self-employed. There are other companies that have run bankrupt, which have deducted workers contribution but have not paid up. There is a view that steps should be taken to make them pay.
Self-employed professionals were also not paying their contributions, or not paying in full to the NIS, the 10.47% of their salaries as required. Contacted to confirm reports that the NIS has several private and public sector entities owing large sums of money, Assistant General Manager Operations Terry Thomas said that this was indeed so.
He said that among them were quasi government operations such as the Linden Mining Enterprise and the Berbice Mining Enterprise and some government ministries and regional democratic councils.
Among the security services are COPS Security Services - which the NIS has taken to court; Instant Security Services and the United Associates Security and Domestic Services Inc.
The NIS has been granted a writ to impound some vehicles belonging to COPS Security Services but it has not done so as yet. Thomas said that among other private companies owning millions of dollars in workers and employers contributions were Kayman Sankar Group of Companies, with which an arrangement to pay had been worked out and the Mazaruni Granite Products Inc. The Mazaruni Granite Products Inc, he said, had an arrangement with the NIS to pay its indebtedness but reneged on that arrangement and the NIS now has the company before the courts.
On the issue of the United Associates Security, Thomas said the company has entered into an arrangement to pay off its indebtedness, which it has adhered to. The company inherited the indebtedness when it took over the National Guard Service, which had been run as an ancillary unit of the Guyana Police Force.
Employees of guard services and other places of work have from time to time told the Stabroek News that when they made claims at the NIS offices, they were told that their contributions had not been paid or were not up to date. They claimed that their contributions were being deducted.
Thomas said that the NIS has taken a decision to honour these claims once it was established that the deductions were made from their salaries and there was no collusion between the defaulting company and the employee.
The NIS official said that the problem of payment was mainly related to Georgetown. There were no problems at the Berbice offices. The problem with getting companies to pay through the courts, he said was mainly because some of the magistrates in Georgetown did not give NIS inspectors the right to prosecute cases on behalf of the NIS.
Commenting on the new development in which employees are now required to pay their contribution as self- employed persons, Thomas noted that the employees were being given raw deals. This development was one in which, he felt, employers were abdicating their responsibility. According to the NIS Act the employer is required to pay 4.8% of their salary and the employer 7.2% giving it a total of 12% of the salaries in contribution to the NIS. The self-employed person has to pay 10.47% of his earnings in contributions to the NIS.
Thomas confirmed that contributions were no longer being paid on behalf of the meter readers employed by the Guyana Power and Light Company Ltd and some employees of Gafsons Ltd. Some companies were trying to escape paying the NIS contributions by employing the workers as contractors. He said that when these employees, working in the industrial sector, make claims they can only obtain sickness benefits and not industrial benefits. The meter readers in particular who may be exposed to electricity and others in the manufacturing sectors were “losing out.”
On the issue of the self-employed and self-employed professionals, including doctors and lawyers, not paying their contributions as they should, Thomas noted that this category should account for a big share of the revenue garnered. Each year, he noted that the projection for this category falls short.
The largest contributors, Thomas said, were those whose payments were deducted by employers but generally they were not the high paid workers.