Impasse
The list of transgressions is short but appears to be impervious. It includes collusion between employers and employees to withhold contributions from the National Insurance Scheme (NIS). It includes an increase in the practice of employers in designating workers under their supervision and control as self-employed persons. Among the insidious practices are the unwillingness of some employers in various industries to register all of their employees with the Scheme and the reluctance of some self-employed persons to register and pay contributions to the Scheme. These are not altogether new challenges of the NIS, but they have moved from the realm of speculation to documented findings of the reform committee set up to find ways to save NIS. The current impasse is between acknowledgement of the problems and implementation of recommendations to resolve those problems. At the heart of the impasse could be the self-employed workers.
Fuss
The responsibility for moving forward on the reform of the NIS rests with the administration which appears to be dragging its feet on implementing the many sensible proposals put forward by the reform committee. The urgency in this matter does not merely concern the survival of the NIS, but also sustaining compliance of those employers and employees who are already discharging their obligations faithfully. After all, the burden is falling on a smaller and smaller group of participants to keep the NIS funded. Those participants would be well within their moral rights to make a fuss about continuing to participate in the scheme if action is not taken to fix an obviously broken system.
Cause for concern
Quite recently, the administration has been fudging around this issue. It has yet to declare in no uncertain terms that it supports unreservedly the continuation and sustainability of the NIS. That would go a long way to showing Guyanese that the NIS should be taken seriously and that the administration would take all necessary measures to defend and preserve the purposes of the institution. This would be an important step in the right direction. The reluctance of the administration to make this pronouncement along with its foot-dragging of implementing the recommendations for strengthening the scheme is cause for concern.
Transparency is not a strong suit of the administration and speculation about its motives for being slow to reform NIS flourishes easily. It has pursued the odd path of encouraging cooperation between the Ministry of Labour and the NIS with the signing of a memorandum of cooperation between the two bodies to inspect records of employers. This implies that inspectors of the Ministry of Labour will act as NIS inspectors and NIS inspectors will act as Labour inspectors, a possible admission that neither group has enough work to keep it busy.
No Confidence
Of greater concern is the perception that the NIS inspectors are incapable of doing their job effectively. In that case, the General Manager (GM) of NIS should fire them and replace them with more competent workers. That the GM of NIS has to sit with a Labour Officer in a joint committee to sort out the findings of their separate inspectors does not inspire confidence in the current leadership of the NIS. The Ministry of Labour will now join the Ministry of Finance and the Presidential Secretariat in running the NIS. Moreover, NIS inspectors will spend valuable time on the Ministry’s work when it could be deploying its resources to fix its own internal deficiencies and better serve the public. By its admission, the backlog of unresolved cases in the NIS could be as high as 98 percent and reflects a need for internal adjustments and a better deployment of resources.
Guyanese would be surprised if, after 40 years, the NIS is unaware of the delinquent employers or does not have effective ways of identifying them. According to the Bureau of Statistics (BOS), Guyanese were employed in about 17 major industry groups. Five industries, namely agriculture, manufacturing, vehicle repair, transportation and utilities, employ as much as 62 percent of the active labor force, or approximately 152,000 workers. The NIS indicates that it receives contributions from an estimated 126,000 workers. Therefore, it is conceivable that employers that support the current administration may be among the violators of the NIS.
When employees from social services and education, the two other significant industries that employ Guyanese, are added to the mix, the total number of workers reach 180,000. The delinquency index increases and with it the likelihood that increased
numbers of supporters of the administration are caught up in a violation of the law.
The bigger issue for the NIS may be its inability to force compliance, even if it catches the cheating employers. It is not clear how this system of cooperation will help the NIS to prosecute more cases, especially since the court system is slow and unreliable. Adding more cases to the load will clog the court system further, unless special arrangements are made to put NIS cases on a fast track. Further, friends in high places might shield some delinquent employers from prosecution. A memorandum of cooperation could not sole any of these problems.
Untenable
The greater concern ought to be with self-employed workers or contractors, those persons, presumably, without books for inspection. This issue might fit in the sphere of the politically untenable for the administration which might be trying to find a way to insert itself into the day-to-day operations of NIS as a means of protecting its supporters.
The NIS caters to self-employed persons as well. It has repeatedly pointed to self-employed workers in the construction and transport industries as being out of compliance. These industries account for 7 percent of the active workforce.
In contrast, the Guyana Rice Development Board estimates that 10,000 farm-families are involved in the cultivation of rice.
The GRDB further claims that an estimated 100,000 Guyanese made up of workers in rice mills, rice export services and input suppliers depend on the rice industry for their livelihood. This is about 14 percent of the entire Guyana population and nearly all the persons currently contributing to the NIS. Unless self-employed persons are included, these numbers could be challenged since the agricultural industry as a whole account for less than 60,000 workers, according to the BOS. With only 126,000 contributors to the NIS, it would appear that a large number of self-employed Guyanese in this segment of the agricultural industry alone could be avoiding their obligations to the NIS.
Support and advocacy
This high degree of delinquency suggests that employers and employees alike do not buy into the system of social insurance. A declaration by the administration of its unequivocal support for the NIS would send a clear signal to its supporters that it expects them to comply with the law. This initiative by the administration should also be accompanied by a sustained dose of education and intensified advocacy on the part of NIS.
Private sector employers would be greatly assisted if the various trade and industry organizations were to get involved in working with their members to ensure compliance with the social insurance law. Organizations like the chambers of commerce, the manufacturer’s associations, the tourism association and the small business association should all get involved in working with their members and constituents to obtain compliance with the NIS. The micro lending agencies, too, could play a valuable role in educating self-employed persons about the NIS and getting them to comply with the law.
