Govt to go after employers not paying NIS
Delinquent employers have been put on notice that their days of not paying contributions to the National Insurance Scheme (NIS) on behalf of their workers, are numbered.
Minister of Labour Dr Esther Byer has taken to Cabinet a proposal aimed at giving the statutory body more power to collect these outstanding contributions.
She told reporters it was important that contributions were paid in to the fund, noting that NIS faced a big problem with collecting arrears.
She explained that her ministry, which has responsibility for the NIS, was seeking to put special arrangements in place to address the problem and improve the situation.
“We have actually carried to Cabinet a proposal for improving the collection of arrears and other things that have to be put in place,” Dr Byer said.
“We have tightened some legislation as well for National Insurance and we are looking at the discussions as we have had in Geneva this year, that of formalizing our economy which has a lot of facets to it.”
She explained that by ensuring that more people in the informal sector were formalized, there would be an increased overall contribution to NIS and government revenue through taxes.
“This is very important now that we are phasing out the non-contributory pension. Before a lot of persons in the informal economy . . . wouldn’t pay National Insurance (but) could apply for a non-contributory pension. They can’t do that anymore so they need to realize that they have to contribute now so when they reach to that stage, there would be something there for them as well,” the Labour Minister explained.
She said the proposed legislation would empower the relevant units within the NIS to be able to get the information they needed regarding employers who were guilty of not paying their contributions and “go after” them.
“This legislation is now in draft. It has to be debated in parliament . . . but it [will give] them more power to be able to examine the relevant documents to get the contributions, because we have a big problem with employers who deduct money from their workers’ salaries,” she said, adding:
“The workers work very often naively trusting that this money has been paid and then when they are sick and when they are terminated, they go to the National Insurance and they are looking for money and no contributions are there.
She went on: “National Insurance policy has been to give the worker the benefit that they would be expecting and then pursue the employer and very often they can’t. . . . That is a leak that we have to plug, so that is the legislation we are looking at now to speak to things like that.”
Dr Byer said the idea was to have, ultimately, a sharing of information between NIS and the Barbados Revenue Authority (BRA).
The minister said the NIS pension fund was also being affected by the fact that the Barbados population was simultaneously aging and dwindling because people were having fewer children.
She said as a result, the retirement age had to be gradually extended to avoid “the risk of not having enough contributions to meet the payments” in the coming years.