Defaulting employers depriving workers of hard-earned pensions
Contact: Prime Minister's Press Secretary
Friday, January 20, 2006 - A sizeable number of employers throughout the island are with-holding payments to the National Insurance Corporation (NIC) and depriving workers of their hard-earned pension benefits. As a result, the NIC is trying to recover over $40 million from over 180 employers who have deducted 5% contributions from the workers salaries, but have refused to submit those deductions.
This was revealed by NIC's Public Relations Manager, Mr. Augustin Louis, who took to the media this week to warn offending employers “are breaking the law.”
The NIC official said the situation has reached a stage now where the corporation feels it is being ignored by the delinquent employers and it has now set a deadline by which they will have to pay -- up or face the music.
In a drive to warn defaulting employers and to alert affected employees, Mr. Louis took to the media this week and spoke on various radio and TV news and current affairs programmes.
He said there were over “180 companies and individual employers in arrears worth a total of $40 million” and warned the guilty employers that “they have up to the end of this month (January 31) by which to submit the outstanding sums,” failing which they could be made to drink bitter medicine.
In an interview on radio St. Lucia (RSL) on Wednesday, Mr. Louis pointed out “that over the years the NIC has been lenient with defaulters.”
He explained: “We have been sending them reminders, reminding them of the penalties for not complying with the law and inviting them to settle. Some have been surcharged and others have come in and signed promissory notes, but some have simply taken a position of completely ignoring us.”
The NIC official pointed out that in some cases, “defaulting employers had been taken to court and judgements were made by the courts against them, but still they have not complied with those judgements.”
He explained that employers who deducted workers' wages and didn't submit them were “depriving workers of their pensions and also breaking the law.”
Mr. Louis explained that “workers naturally expect that the 5% deducted from their wages is always being paid to the NIC by their employers so that they can draw on their pension benefits when they reach retirement age.”
“But in many cases,” he pointed out, “that is not always so, as persons come to collect their benefits, only to find out that their employers did not submit their deducted contributions on their behalf.”
He said the only way workers could ensure their payments were being made was to make periodic checks with the NIC to certify the status of their payments.
According to Mr. Louis: “We submit annual statements to all employees, and these workers need to always examine them to ensure their deductions are being submitted by their employers.”
In addition, he said, “they can also come to the NIC at any time to check on their statements to verify.”
Explaining the decision to set the deadline, Mr. Louis said: “We at the NIC have been lenient over the year, because we are not out to create hardship for employers. We do not want to put them or the workers at a disadvantage. Sometimes we haven't even enforced the decision of the court for that very reason.”
“But,” he continued, “things have gotten out of hand and we need to send a strong message to the defaulting employers that we are serious this time and they need to make good on their outstanding arrears.”
He warned that those who feel the NIC may be joking or is simply engaging in an exercise of threats without intention to take action that “this time, they will find out that the rules of the game have changed.”
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