Who is an Employer?
A person or body corporate (partnerships, companies or corporations) with whom an employee has entered into a contract of service whereby such person or body corporate is liable to pay salary, wages or other remuneration for service performed by the employee.
Every new employer must register with the NIS within seven (7) days of employing the first employee. The employer must submit an Application for Registration as an Employer (Form R3) in order to obtain a registration number. In stating the “nature of business”, the employer should state the type of economic activity in which he/she is engaged. If there is more than one type of business activity, show only the major activity.
At the end of every pay period contributions must be deducted from the employees’ wages/salary. Currently, the total rate of contribution is 8% of insurable earnings. Of this total rate the employee pays 3.5% and the employer pays 4.5%. Insurable earnings will correspond to all earnings up to $51, 996.00 per year or $4,333 per month or $1000 per week.
The earnings of an employee on which contributions are payable include salaries/wages, as well as:
- Overtime payment
- Payment for night or shift work
- Arrears on salary
- Holiday pay
- Family allowances
- Service charge
- Payments in kind
- Danger money
Remittance of Contributions
All employers are required to pay the NIS contributions within one (1) month after the end of the preceding month. The contribution payment must be made together with the monthly remittance form (Form C2) and the “Turn Around Document” (Form C5) that clearly shows:
- The name and registration number of the employer
- The names and registration numbers of all employees and the month for which payment is being made.
- If there are weekly paid employees, the amount earned for each week should be indicated. This information must be submitted on a separate “Form C5”.
- The name of the authorizing officer and signature
- The insurable earnings and total 8% contributions
- The total amount of NIS contributions to be paid
- Gross wages/salaries
Payment may be made by post or in person at the NIS Offices in Kingstown and Union Island.
When an employer fails to pay the NIS contributions within the prescribed time, he/she is liable to pay a surcharge of 10% of the total contributions payable. For every month or part of a month that the contribution payment remains outstanding a further 1% interest is charged.
Where an employee works under the general control and management of a person other than his immediate employer, that person (principal employer) is regarded as the employer liable to pay the contributions. The immediate employer is expected to furnish the principal employer with particulars of the employees’ wages/salaries to enable the principal employer to comply with the provisions of the NIS Act and Regulations.
Electronic submission of records
The NIS makes it easy for Employers to submit their records electronically. If you have your own software installed such as Micro-Pay, you can export the records in the desired electronic format, Check with your Software vendor or SCL to determine the version which will work.
On October 12th 2009, we unveiled a new Internet based wage reporting tool called eSubmit+. Registration is Quick, Free and Easy. From our main home page, register for an account, or click here. Once you have registered, we will populate the system with all your current employees, please note that you must be fully compliant and up to date with your records. A comprehensive manual has been designed to help you.
Other information relating to the payment of contributions
- It is illegal for any employer to recover the employer’s part of the contribution from the employee. This constitutes an offence under the National Insurance Act.
- Contributions made to the NIS by employers and employees are regarded as allowable deductions for tax purposes.
- Where an employee works successively or concurrently in a contribution week or part of contribution week by more than one employer, each employer is liable to pay the NIS contributions with respect to the wages paid to that person.
- Any contributions paid in error are refundable on an application to the Executive Director of the NIS.
- Contribution is payable for the full week in which the employee attains age 16 or 60. However, if the 60th birthday falls on Monday no contribution is payable for that week.
- The employer is liable for the payment of contributions for any period during which an employee is on vacation, sick leave or maternity leave and receiving wages/salaries.
- Contribution is not payable for the period during which an employee is receiving sickness or maternity benefit from the NIS.
The employer is required to submit the certified records of employees’ earnings (Form C1/1) and the Form C1A for each year by January 31st of the following year. New records will be issued to employers in respect of their employees for the New Year.
This document is issued for each employee and it clearly shows the employee’s:
- Name and NIS number;
- Total annual salary and insurable earnings;
- Total NIS deductions
- The number of weeks worked during the year
- It also shows the employer’s name and registration number.
It is important that each employee sees and signs this document in order to verify the information that is being presented before it is submitted to the NIS Office.
When an employee, who already has a registration card and in respect of whom a Form C1/1 has already been issued to a previous employer, becomes employed in another establishment, the new employer should obtain another Form C1/1 from the NIS on behalf of that employee.
If an employee changes employment, his/her Form C1/1 should be returned to the NIS Office within seven (7) days of changing employer.
In cases where an employee’s service has been terminated during the year, that person’s record should be returned to the NIS Office within fourteen (14) days of cessation of the employment. The record should show the date on which employment ended; the employee’s last address and should be signed by the employee.
Records of employees’ earnings are valuable and hence, the employer should always keep them in a safe place. These records should not be defaced or in any way be tampered with. Loss or damage of records of employees’ earnings should be reported promptly to the National Insurance Office. Employers should remember that the records of employees’ earnings remain the property of the National Insurance Services.
Whenever a record is requested by the NIS Office, that employer should return the record to the Office promptly to facilitate the speedy processing of benefits claims among other things.
The employer is required to submit an End of Year (Form C1A) for the recently concluded year, in respect of all employees. This document presents the following information:
1) The employer’s name and registration number
2) The total number of employees
3) The total gross pay and insurable earnings of all the employees
4) The total NIS contributions payable for the year (8%)
All information requested on this return must be given as fully and correctly as possible. Where an employer is a body corporate, society or other body of persons, the declaration and statement must be signed by an agent duly authorized to do so.
A Compliance Officer is an officer of the National Insurance Services appointed and designated by the National Insurance Board to carry out the task of ensuring that all persons comply with the National Insurance Act and Regulations.
The National Insurance Act 33 of 1986 Section 12(1) gives a Compliance Officer the power to enter at all reasonable times any premises or place where he/she has reasonable cause to believe cause that persons are employed, and to make any examination or inquiry which is necessary for him to ascertain whether the provisions of the National Insurance Legislation are being complied with.
An employer or his agent upon request by a Compliance Officer must provide information on employees or persons who have been employed by him/her and produce all wage/salary sheets, contribution documents and any other records as requested by the Compliance Officer.
All Compliance Officers are issued a certificate of appointment by the National Insurance Board. Before entering any premises or place, they are expected to produce this certificate. Employers should examine a Compliance Officer’s Certificate of Appointment before delivering to them any records of the NIS or records of employees’ earnings.
Please note that anyone who:
Willfully delays or obstructs a Compliance Officer in the exercise of any of his/her powers; or
Refuses or neglects to answer any question or furnish any information or produce any documents when required to do so is liable on summary conviction to a fine not exceeding $5000 or to imprisonment for a term not exceeding six (6) months or to both fine and imprisonment.
In the absence of the employer or his agent, occupier of the premises or place liable to inspection any person acting for the employer or his agent, should furnish the Compliance Officer with such information and produce such documents as an Officer may reasonably require in order to carry out his functions.
All benefits are processed based on the wages/salaries submitted by the employer. As such, employers should facilitate their employees’ benefit claims by:
- Submitting the payments on time
- Ensuring that all registration numbers are quoted on the remittances
- Signing the appropriate forms and
- Providing any information that may be required to process the benefit
The National Insurance legislation places a considerable amount of responsibility on employers. This responsibility will be easily discharged if the following rules are adhered to:
Register as an employer within seven (7) days of employing someone
Ensure that all employees are registered with the NIS
Keep proper records of wages/salaries paid to employees and the contributions deducted.
Pay contributions on a monthly basis
Submit the fully completed turnaround document (Form C5) and the monthly remittance documents (Form C2) each month.
Return all end of year documents when requested by the NIS
Inform the office in the event that the business is closed (preferably in writing).
In cases where an employee is injured on the job, the employer is required to submit a written report within 10 days to the NIS explaining the nature of the injury.
Keep all documents in a safe place.
Submit original documents only.