by Larry Smith
"That’s what we’re going after this year,” Stephen Thompson told the Tribune. "We’re asking them to come in so they can bring these agreements up to date.”
Thompson said compliance by Bahamian employers was as low as 30 per cent when it came to paying due NIB contributions in full, and on time. And this represents millions of dollars in outstanding payments.
These delinquent companies are either not making deductions from their revenue and employees’ salaries or, in some cases, are taking the money from worker pay cheques but pocketing it themselves, Thompson said.
Say what? My little business has had to extract a letter of good standing every year from NIB, or we would not get a business licence, and would be prevented from importing goods or bidding on government contracts.
So what was Thompson going on about? I asked Rowena Bethel, NIB director, to explain. Here is a summary of her response:
1. Historically, about 65 per cent of businesses do not pay their contributions within the time stipulated by law, which is 15 days from the end of the month in which they become due.
2. The percentage of employers and self-employed persons with arrears of six months or more is about 59 per cent; about 46 per cent have arrears of 12 months or more, and the percentage with arrears of three years or more is 24 per cent.
3. Not all businesses operate with a business licence or a current business licence. But that is a matter of concern for the Business Licence authorities.
4. The Letter of Good Standing from NIB is a requirement for the renewal of a business licence and, now, also for the VAT Tax Compliance Certificate.
5. NIB works with businesses that have contribution arrears, so long as they are cooperating in a meaningful way to reduce the arrears, while continuing to pay their current contributions.
6. At least half of the arrears cases are self-employed persons, who are unable to claim a benefit where they have not made the requisite contributions. More modern techniques for compliance are being implemented to reduce these numbers.
7. Delinquent businesses run the full spectrum of employer type and cover the entire Bahamas, although non-compliance is more chronic amongst smaller businesses.
8. The employer population base is 24,000 and the self-employed population base is about 20,000.
9. Strategies are being revised to tackle the persistent arrears problem. One component is to carry out a registration campaign to identify those businesses which are still operational. A new IT platform will help to bring more control by enabling proactive actions by NIB.
10. In 2015 there were1803 cases in varying stages of processing for legal action, but tackling delinquency early on, before a matter requires legal action, is the more effective approach.
11. The primary objective is to secure the contributions needed to fund benefit obligations. But employees once NIB is certain that, at the relevant time, they were gainfully employed claims will be paid and employers will be pursued.
12. An actuarial review is required by law every five years. The last published review was in 2011. A review was undertaken by the International Labour Organisation last year at the government's request, but the resulting report has not been released.