IMPLEMENTATION of the new minimum wage will lead to several security guards at RK’s Guyana Security Services losing their jobs, Chief Executive Officer and Founder, Mr. Roshan Khan said yesterday.

The government which is the main customer also will consequently lose RK’s security services unless it    helps the company to cushion higher wage costs associated with the new minimum wage.
During a media conference yesterday, Khan said the company was facing an economic crisis, particularly since most of its contracts were associated with government locations and since government has not yet indicated how it will help the company to stay afloat with the higher wage bill for its services.
He said the new minimum wage had created a very grave situation for security services generally, particularly those serving government agencies.
“At the start of the year we were contracted by government and a certain sum was approved for us. Then government raises the minimum wage suddenly on us, how will we be able to accommodate that increased cost of operations?” he asked.
He charged that government has, to date, not yet addressed this matter of increased costs to be borne by the company. The new minimum wage took effect from July 1 last.
Speaking about the impending layoffs, he said: “I have to terminate the services of workers because it would be economically nonsensical for me as a businessman to continue working for   the rates which existed prior to the new minimum wages.”
He said: “Even if the government gives us an additional $60 an hour it would not be adequate because there is overtime to be catered for, the National Insurance Scheme (NIS) ceiling goes up. When you raise the guard’s  minimum wage the supervisors and the managers also looking out for something more on their salaries.”

SEEKING INCREASES OF 50 to 60%
Khan said his company will have to receive increases of 50 to 60% more than it currently receives in order to pay the new minimum wages and  remain afloat.
He said that he had written to government officials letters terminating the security services at several government locations with effect from July 15th.
He said that another 40 RK staffers are likely to be laid off within seven days after that.
“We have to give up the contracts since government has not yet agreed to give us the requisite increase to help keep us afloat.”
The private customers will also feel the squeeze.
“Since the increased wages many of them cannot afford our consequential increased charges. They are trying to negotiate the increase, to give us something now, something later but we are looking at a situation which can result in a very serious loss to the company taking it even to the point of bankruptcy.”
Also present at the media briefing was a senior member of another security service, GEB, which Khan said was also adversely affected by the current state of affairs.
Layoffs for similar reasons are likely to occur in other security firms as well, Khan said.
He said that he was not against a new minimum wage but hoped that the government will move to resolve the current problem before the layoffs and other negative consequences take effect.
Labour Minister, Dr Nanda Gopaul  announced the new minimum wage in May last, disclosing that more than 31,000 persons in Guyana will benefit from the $35,000 minimum wage standard slated to take effect from July 1.
He disclosed that employers who pay their staff below the national minimum wage will be prosecuted and if found guilty, would pay a fine of $35,000 for the first offence. The second offence will result in a fine of $75,000 and one month in jail.
The local private sector organisation, the Private Sector Commission, recently  said that while it welcomed the new wages, given the implications for businesses, it wanted to request more time beyond the July 1 implementation deadline.