Delinquent employers in T&T owe the National Insurance Board (NIB) hundreds of millions of dollars for non-payment of national insurance contributions on behalf of employees.

The Annual Reports of NIB showed that in 2018 employers were in arrears of over $437 million. In 2017 employers’ arrears amounted to $565 million and $383 million in 2016. The Sunday Guardian was unable to get the 2019 figures.

The National Workers Union (NWU), located in Barataria, has written to the NIB, the Director of Public Prosecutions (DPP), Police Commissioner, trade union bodies and parliamentarians on the issue.

The union told the Sunday Guardian that it is “utterly scandalous” that employers are in arrears to NIB in the sum of hundreds of millions of dollars.

“The Annual Reports of the NIB are always laid in the Parliament. The 2007 Annual Report showed that the ratio of contribution arrears to contribution income continued to decline, moving from 1.4 per cent in 2006 to 1.1 per cent in 2007. In 2018, the ratio of employers’ arrears skyrocketed to nearly ten per cent. Clearly, this is a scandalous and obscene situation,” the NWU stated.

The NWU referred to Section 40 of the NIS Act which stated: “An employer who fails or neglects to pay or effect payment of a contribution in respect of any person in his employment who is required to be insured under this act, is liable on summary conviction to a fine of four thousand dollars and six months imprisonment and in the case of a continuing offence shall be liable in respect of each person for whom he neglected or failed to pay or effect payment of contribution, a further fine of one hundred dollars a day for each day that the offence continues after conviction.”

The NWU said these employers were committing “criminal offences.”

In its letter to the NIB, the NWU proposed that the NIB Board take steps to publish a full list of those employers in arrears and the amounts owed.

They also called on trade union bodies like the Joint Trade Union Movement (JTUM) and the National Trade Union Centre (NATUC) to request that the labour representatives on the NIB Board call for a special board meeting to raise this issue for urgent discussion and enforcement of the law so that employers will comply with their duty. They said this will go a long way in ensuring the payment of benefits and the survival of the NIS system.

Michael Annisette, general secretary of NATUC said tougher legislation was needed to deal with delinquent employers as the fine is too small.

He suggested that a database be set up by the NIB so that employees and employers would be able to monitor payments made to the NIB after deductions are made. In this way, any attempts to manipulate the system will be prevented.

He said the NIB should also publish in the newspaper the names of all employers who have not fulfilled their duties to the NIB. He said this was a way of embarrassing errant employees.

Annisette also said that there are labour representatives on the NIB Board and NATUC would continue to bring new proposals so that workers are not exploited by unscrupulous employers.

ECA to employers: Take immediate steps to rectify the situation

The Employers Consultative Association (ECA) in a statement stated that while the issue has been brought to their attention through media reports, they have not been able to validate cases where employers have not been paying workers’ contributions to the NIB.

The ECA is the country’s largest body that represents employers on Human Resource Management and Industrial Relations issues.

However, in the cases where this happens, the ECA is advising guilty employers that they should take immediate steps to rectify the situation given the relative impact on the employees from whom these deductions would have been made, keeping in mind that these deductions are for a very specific reason.

“We would also advise employers of the possibility of litigation as well as the denial of a benefit to employees. National insurance deductions and contributions are a statutory requirement and depending on the circumstances, non-payment to the NIB could be deemed an act of fraud.”

The ECA also advises that where non-payment of sums deducted as national insurance contributions is proven by the NIB, in addition to securing the outstanding payments, the NIB should undertake education interventions for those employers.

“Where it is confirmed that non-payment was not as a result of purposeful non-compliance, but genuine inability to pay, where applicable, another approach could include the introduction of a system for legally ‘garnishing’ bank accounts of debtors to employers where it is firmly established that monies owed would have allowed the employers to cover the outstanding national insurance payments.”

However, the ECA said, “where it is established that non-payment is due to mere delinquency on the part of the employer, the full suite of actions provided for under the National Insurance Act should be undertaken by the NIB.”

‘Widespread lawbreaking’

Labour consultant Robert Giuseppi is claiming that the problem of employers not paying workers’ contributions to the National Insurance Board is “widespread”.

He justified this given his experience as a trade unionist and now as a labour consultant.

Giuseppi, who is also a former president of NATUC, said that this was a prevalent in workplaces that are not unionised.

He believes that institutions like the Ministry and Labour and the NIB must look after the welfare of employees and ensure that employers desist from these illegal actions.

“Many workers make their contributions and are unaware that their employers are breaking the law by not paying their contributions to the NIB. What do they do? Who do they turn to? About three years ago, I dealt with an issue like that and it was a company in the oil industry. It is sad that this sort of nonsense continues to happen.”

No response from NIB

The Guardian sent questions to the NIB to clarify the issues raised by the labour movement but up to late yesterday, the NIB did not respond.

According to the NIB’s website, the payment of National Insurance contributions is compulsory for employees and unpaid apprentices who are registered or eligible to be registered under the system. A contribution is a weekly payment fixed to the wages/salaries of the insured person.

Payment of the contribution is shared between the employer and employee in the ratio of approximately 2:1 in accordance with the rate set out in the act. The employer is statutorily obligated to deduct the employee’s share no later than on the date of payment of salaries/wages.