10-15 percent of private sector employers owe more than $500m in employee contributions
NIS reform seeking to tighten up on delinquents
Stabroek News
May 4, 2007
The National Insurance Scheme (NIS) is pinning its hopes on the outcome of its current reform process to stem the tide of what a source told Stabroek Business has become "a chronic problem of serious delinquency in the payment of employee contributions by private sector employers across the country". "There are prominent businessmen in this country who are actually getting away with denying their workers the opportunity to receive NIS benefits in times of illness. It is ironic that many of our private sector employers think so little of their employees that they are not even concerned about their personal welfare," the source told Stabroek Business.
This newspaper understands that private sector employers and self-employed persons across the country owe the National Insurance Scheme more than $500m in employee contributions and according to the source the reform process seeks to place mechanisms aimed at reducing the delinquency. Official hearings associated with the reform process got underway recently and the NIS source told Stabroek Business that the reform exercise will focus on changes in the law that will provide stiffer penalties for employers who fail to meet their obligations to the Scheme.
And while legal action has been taken against some of the transgressors an NIS source told this newspaper that in many cases the Scheme probably has very little chance of ever securing those outstanding amounts.
In recent months the NIS appears to have taken a more assertive position on the collection of outstanding contributions. However, the source told Stabroek Business that the Scheme continues to be frustrated by "protracted court procedures" and by various ruses designed by transgressors to "drag out" litigation. According to the source the environment in which the NIS was seeking to collect sums owed to it was one in which the Scheme probably had "very little chance" of collecting much of the money owed to it.
One practice that is commonly employed by transgressors after court action is taken is to concede indebtedness but to query the amount claimed by the NIS. The source explained that once such a query is made the courts then request that the parties meet to enable a reconciliation before a judgment is made.
The source cited the case of the security firm United Associates Security and Domestic Services Inc. (UAS&DS) which reportedly told the courts that inaccuracies in documents which it (the UAS&DS) had submitted to the NIS had resulted in an erroneous calculation of the amount owed by the company. The Scheme is claiming an amount in excess of $40m from the security firm. The NIS was due to hold a reconciliation meeting with UAS&DS officials earlier this week and the source told Stabroek Business that the Scheme was confident that its calculations of the amounts owed by the company did not exceed what was actually owed.
Between 10 and 15 per cent of private sector employers in Guyana are "in serious arrears" in their NIS employee contributions and the source told Stabroek Business that the Scheme had come to the conclusion that many of these had no intention of making the payments and that their real intention was to "defraud the workers in their employ." The source added that several of the delinquents, including some major private sector enterprises had become adept at falsifying their employment records to disguise the number of workers in their employ.
Faced with court proceedings several delinquent employers have also approached the Scheme with proposals for a regime of payments over a protracted period.
The NIS source told Stabroek Business, however, that several of those employers simply never honour the very proposals that they make while others make proposals under which they agree to pay such small amounts that they are simply not viable.
Meanwhile Stabroek Business understands that NIS Inspectors have begun to make approaches to members of parliament including ministers of government who are in arrears in their payments both as self-employed persons and as employees but that the Scheme is yet to make "any significant headway" in persuading parliamentarians to pay up. The source said that under the law the Scheme was empowered to move to the courts against the parliamentarians but that it was up to the Board of Directors to make that decision.
Cabinet Secretary Dr Roger Luncheon is Chairman of the Board of Directors of the NIS.