inspection finds widespread non-compliance among security companies

SOME security firms that provide services to government agencies nationwide have been ordered to pay as much as $60 million in unremitted deductions, following an inspection by the National Insurance Scheme (NIS).
This was, on Thursday, revealed by People’s Progressive Party (PPP) General Secretary and Guyana’s Vice President, Dr. Bharrat Jagdeo, during a news conference.
Dr. Jagdeo told reporters that the government, following an investigation, has flagged several security companies that failed to remit NIS deductions.

“About 8,000 people out there are employed through security companies that supply these services to the government of Guyana that we found are not paying the NIS,” Dr. Jagdeo said.
Several citizens employed by various security companies across the country have complained that payments are being deducted from their salaries; however, their employers are not remitting these to the NIS.
This was among several major concerns raised during a recent government outreach.
“We launched the investigation. I have the report. They have been given time, some of them have to pay $60 million. They have to say it or it would be sent to the police force and they are not going to get any contracts again. Their contracts are going to be cancelled,” he asserted.

Jagdeo further highlighted that the government will soon go further to ensure that the minimum wage is being paid to employees.
“They are scrambling now…we are going through everyone, and we are going to ensure too that they are observing the minimum wage for the people.”
Last month, the NIS began inspections of several security firms that have been providing services to government agencies.
“The security companies, they get paid for a service. They have to pay the people who are working for them, and they have to also ensure and pay them on time and ensure that their deductions for taxes and for the NIS, especially NIS, that those are remitted,” Dr. Jagdeo had said during a previous news conference.

Only recently, Attorney-General (AG) and Minister of Legal Affairs, Anil Nandlall, had issued a strong warning to employers, reminding them that it is a criminal offence to withhold National Insurance Scheme (NIS) contributions from employees without remitting them to the NIS.

Following a recent ruling by the local courts, the Attorney General reminded employers that while they are allowed to make NIS deductions from their employees’ salaries, a failure to pay over those monies to the NIS constitutes a criminal offence.
Nandlall had raised this issue while addressing circulating reports regarding an appeal filed by NIS against a High Court decision.
In that decision, High Court Judge, Damone Younge, ordered the NIS to pay a pension to Sharif Zainul, a former employee of Toolsie Persaud Limited (TPL).
Nandlall explained that the appeal was not initiated by the Attorney General’s Chambers but by the NIS itself, shedding light on critical aspects of the case.
“No such appeal was filed by the Attorney General’s Chambers. An appeal has been filed, but it has been filed by the National Insurance Scheme.”
Zainul, through his legal representatives, solely sued the NIS, neglecting to include his employer.

He highlighted the crucial issue at hand: Toolsie Persaud Limited was not made a party to the proceedings, and the appeal seeks to address this omission.
“The NIS records show that no remissions were made by the employer to the NIS. The gentleman apparently had records that were produced to the court to establish that deductions were made from his wages or salaries.
“However, the NIS records do not establish that those deductions were actually paid over to NIS, and that is the problem with the case. Because we know, you know that there are many employers who are actually deducting NIS payments from employees,” he said.
As such, the AG warned that deducting NIS payments from employees but failing to remit those payments to the NIS constitutes a criminal offence under the law.
NIS extends Social Insurance Coverage on a compulsory basis, to all persons between the ages of sixteen (16) and sixty- (60) years who are engaged in Insurable Employment.
In accordance with the information provided on NIS’ website, contributions into the Scheme are made by both the Employer and Employee through a ‘Payroll System’. Employed contributors make a total contribution of 14 per cent of the employee’s actual wage/salary. This is a result of a deduction of 5.6 percent from the employee’s salary, with the employer covering the remaining 8.4 percent on behalf of the employee. The actual wage/salary is, at present, subjected to a ceiling of $280,000.00 per month or $64,615.00 per week for national insurance purposes.