With less than half of the workforce making contributions, the National Insurance Scheme (NIS) signed a Memorandum of Cooperation (MOC) with the Labour Ministry to partner in monitoring these payments, ensuring employee deductions are paid to the scheme.
The signing of the MOC took place yesterday at the Office of the President. Acting General Manager of the NIS Doreen Nelson signed the pact with Permanent Secretary in the Ministry of Labour Human Services and Social Security, Trevor Thomas. The partnership will take immediate effect.
The agreement states that Labour and Occupational Safety and Health (LOSH) officers during their inspections of businesses would check the wages’ records of the businesses and note whether NIS is being deducted from the workers’ emoluments. They will also check to see if the deductions of NIS employees and the contributions are being paid in to the NIS in a timely manner.
NIS inspectors, during their inspections will note breaches of LOSH laws. Under this MOC, information on the payment of NIS contributions by the employers will be entered into the Labour Ministry’s website database. On a weekly basis, a report on delinquent employers shall be sent to the Head of the NIS. The NIS inspectorate, on the other hand, will on a weekly basis compile suspected labour laws’ violations, which will be sent to Chief LOSH Officer Yoganand Persaud, through Nelson.
According to Nelson, over the last few months a joint task force was constituted to discuss greater cooperation between the two entities. She added that coming out of the reform process and even the actuarial reviews, low compliance rates has been identified as an issue. She said that as a result of the deliberations, it was decided that a lot more could be done if a partnership were formed. She said that this system would benefit both entities.
Labour Minister Manzoor Nadir pointed out that both the NIS and the LOSH Department have to inspect the same wages’ records and as it related to his ministry it was not too much of an effort to check that workers’ deductions and employers’ contributions are paid over. He said the agreement called on each entity to empower the other officers with the legal authority to carry out work for NIS and Labour Ministry. Nadir stated that the laws relating to the NIS and Labour, allow these bodies to appoint additional persons as inspectors.
He said there is need to ensure that there is adequate social security protection for the local workforce, and pointed that the only system set up to do this is the NIS. But in order to ensure the social security is provided the system has to be working well. Meanwhile, Nadir stated that out of a workforce estimated to be 250,000, less than half—approximately 121,000 members—are contributors to the NIS.
Nadir pointed out that where prosecutions have to be made, with regard to breaches related to NIS affairs, that body will spearhead them, while the Labour Ministry will look after prosecutions in relation to LOSH.
Chairman of the NIS Board Dr Roger Luncheon described the initiative as a “practical one”. He said “the agreement intends to heighten the interventions needed in the context of what is happening in Guyana in the sphere of organised labour and compliance with… social security legislation and the labour laws.” He added, “frankly speaking the situation must be improved.”
Meanwhile, Luncheon acknowledged that many self-employed persons do not contribute to the scheme, and this needs to be addressed. He also disclosed that the NIS is not happy with the way the deductions of employees and employers’ contributions are remitted and credited to the contribution records of individual employees and hopes that the partnership will help to address this problem.
He said that this will help to minimise duplications and redundancies since there will be more inspectors available to cover a wider range of persons.
This, he suggested, will allow for employers who would have previously slipped under the radar to get the necessary attention.
The implementation of the MOC will be done through a joint committee. “The committee shall comprise the head of the NIS and the Labour Occupation Safety and Health Department (LOSHD) and one senior staff from each entity and shall select a chairman from among themselves,” the agreement states.
