Violators to lose T&B licence
(CNS): The employment minister has said that the Pensions Law needs to be enforced in such a way that the money owed to employees gets into their pension funds rather then trying to prosecute offenders through the courts. A report by Complaints Commissioner Nicola Williams revealed a catalogue of problems with private sector pensions, including the theft of employee contributions from employers, and recommended a complete overhaul of the legislation. Rolston Anglin has said that his ministry has been focused for several months now on creating a new system in which employers will be held accountable for the pension contributions they owe through administrative fines and the removal of trade and business licences.
Speaking at a town hall meeting hosted by the premier last week, when asked to comment on the OCC report, Anglin said the problem was a long standing one and not a new issue. However, he said his ministry had been working on a lengthy review of all the laws relating to all employment and, with the help of lawyer Theresa Lewis-Pitcairn, were working on drafting legislation that would change the entire system and ensure all employers violating any employment law would face immediate consequences.
“We are going to ensure that we put in place a regime where pension violators can be dealt with administratively and immediately,” he said. “If we don’t have a law that’s enforceable and that ensures swift action can be taken, we will continue to fight a losing battle.”
The minster added that government needed to look very carefully at the entire matter of the enforcement of workplace laws and he wanted to see a legal regime where employers who were breaking laws could be swiftly held to account and at the same time protect the rights of workers more effectively.
With less than 20 cases out of more than 600 prepared and passed to the legal department, Anglin told CNS that there were clearly major problems with the way that pension violators have been dealt with over the years. Trying to prosecute employers did not help anyone, least of all those employees who were missing money from their pensions, he said.
“The aim of my ministry is to bring violators to account and then get the money back into the pension funds,” Anglin said.
Demonstrating that an employer had violated the pension law was not difficult, he suggested, and once that was established the goal was to get the employer to pay. He said government intended to do that through the threat of fines and sanctions, such as the loss of a trade and business licence, which in turn would prevent employers from obtaining work permits.
He said that giving powers of enforcement directly to inspectors who would in future be dealing with all types of employment law violations would be far more effective than trying to put together legal cases for the courts. Anglin said the employment inspectors would be able to levy fines or instruct the licensing board to withhold businesses licenses unless employers come up with a payment plan to meet their pension obligations.
The OCC report, entitled Penny Pinching Pensions, was made a public document following its tabling in the Legislative Assembly on 10 September. The complaints commissioner told CNS that she was disappointed that the members had not chosen to debate the document in the House but was pleased to hear that government was considering an overhaul of the legislation, as recommended in the report.
Williams said the office was very pleased with the quality and accuracy of the report and, most importantly, it was now a public document which everyone could access and understand the current situation. She said she looked forward to seeing the root and branch change that she recommended in the report as quickly as possible. “I would want to see the entire private pension regime better regulated and properly administered,” she said, adding that even if the government chooses not to follow her recommendations, if the new law worked she would be very happy.
The method, she said, was less important than achieving the goal of preventing employers from stealing their employee’s contributions and ensuring that people’s pensions were saved before it was too late. Despite what happens next, in terms of legislative change, Williams said her office would continue to monitor the situation for compliance with her recommendations.
This was Williams’ first own motion report, which, she said, had been a long process as she and her team were keen to ensure that all reports to come out of the OCC were not just relevant and comprehensive but accurate and well researched.
As a result and given the regular workload of the office, she said it would be several weeks before the team embarks on another own motion. Williams said there were three issues which she felt needed to be addressed and details about which one would take priority would be revealed before the end of the year.
Category: Headline News
Wow – people who don’t pay their pensions should be arrested – OK what about all the people who don’t pay their credit accounts on time so businesses don’t have the money to pay their pensions and for that matter the wages to their employees – can we report these people to the T&B board or immigration or the government so that they are arrested as well because at the end of the day -those people are the route cause of it.
IF it is OK not to pay for the your credit accounts on time then why is it not OK to pay pensions late ! The answer is that they are both equally and morally wrong. If you can’t afford to pay for it then don’t buy it !!And don’t use the black market to get something cheaper than the regular price because guess what you are part of the problem.
So when you buy a service from someone ask to see if they are paying the pension and health or even have a valid T&B licence!- If they not have one then report them but don’t use their services.
What more does it take for ANYONE to see that Cayman is NOT a moral or modern country? Stealing money from the honest and hard working is normal here. Why else would no one care? Why else would everyone see that the thieves including the Government of the day are getting away with it? Why else are the victims completely helpless? Why else can a Government who is SO incompetent in everything they do, failing at almost everything they do, Sucking up so much of the public’s fortunes with nothing to show but actual dept, and no change in sight, keep getting away with it? I would love to see the leadership of the island answer any of these many questions.
And the real reason: Why do the people who can vote allow it to continue? Would any of you voters like to answer?
I say give the responsibility for this to DER- after all it is an EMPLOYMENT issue and should be dealt with by them accordingly.
I am aware of the DER having some successful prosecutions, especially for no payment of overtime.
The solution is fairly simple, charge them with theft and, if found guilty, put them in jail for a day. Make an announcement that proceedings will begin in one month.
A police record for theft means they will have serious problems trying to renew a US Visa, so by the time the first ten have been convicted the rest of them will be lining up to pay their arrears.
Great idea, let’s start with the biggest thief, let’s see which Government person(s) can we put in jail for one day.
Wait, right CIG is not a thief, that’s right for them it is called an ‘unfunded liability’ …
Ok so small business are not theives either, they are just unfunded liabilities …
Now watch as nothing further happens.
If I recall, Mr. Anglin’s proposal was suggested once before as the only workable solution to bring non-cooperating and absent-minded employers into line. Although the pension administrator is required to notify theOPC within a period of time of an employer being non-compliant, in most cases a formal complaint to the OPC from an employee is apparently needed to get the ball rolling and for any action to take place. Things are supposed to progress from there but as we can see with some 600 cases outstanding the process has not been a dismal failure. In spite of all this what many in authority still neglect to take into account is another part of the problem. How this ties in with the issuance of work permits. That is, someone remaining employed, under duress, while their pension is being stolen by the person holding their work permit. It is has been very convenient for the administrator to pass the buck to the OPC, and the OPC to complain about a lack of resources, but it does not address the position of employees, or why employers feel they can get away with it.
How about the ability of an employer to cancel a work permit? How about the employees who helplessly know their pension deductions are being stolen? How about the reality that anyone on a work permit resides somewhere else? How about the two year waiting period required to access their pension funds?
How would they do that… if they’ve never been submitted? An answer is required for that. Anyone in authority care to?
This system is shot full of holes, and every fearful employee knows that. And every dishonest employer is aware of it.
You see Mr. Anglin, if your money has been stolen and you can’t find it it doesn’t matter to you.. if the employer can obtain a business license or not. It matters to you only where your money is and when you’re goingto see it. Ask any employee and they will tell you exactly the same.
The reality is, the vast majority of people who are and have had their pension funds stolen are ex-pat workers because all of the regulations work against them, and to the benefit of employers. The solution may be to require mandatory pension deductions for Caymanian employees only as they will be around to pursue any discrepancies and to allow ex-pat workers the optional route of contributing to their own pension plan. Outside of and apart from their employment.
The authorities would then only need pursue the 5% employer contribution. Then, at least employees wouldn’t have to take the full brunt of this thievery. And it is just that.
I’m not usually a proponent of more paperwork, but surely it would make sense to require every application for renewal of a T&B to be accompanied by evidence that all employee pension deductions have been applied correctly and all employer pension contributions have been made.
Or introduce an audit requirement for localcompanies to ensure compliance.
And if you are an employee that suspects your pension contributions are being trousered by your employer you need to take some action! Phone the police or at least see an employment lawyer.
What about the employee’s who are reporting to the OCC that their pension deductions are not been paid up, when the employer check his/her pension Administrator, every deduction was paid up to date for those employee’s.
Is that not extorton by that employee. The inspector should investigate all reports to see if its true or false before any penalty be hand down.
A penalty should also be levied on a dishonest employee
what are you talking about?? Of course they would check first to see if the claim was legit. As of now they don’t chec at all
Put down the pipe and give your head a shake. You clearly have no clue.
" Prosecuting employers (who violated the laws) did not help anyone, least of all of those employees who were missing money from their pensions".
Huh? It only doesn’t help anyone if the cases are dragging on getting tied up in the legal system. Put it on fasttrack and punish the people who have comitted a crime! Make them pay the funds they omitted plus interest that would have been, collect a HEFTY fine, supsend the T&B license until everything has sorted and in the meantime barr them from setting up another shop.
Come on, you are not going to tell us that it makes no sense to prosecute a thief because chances are you won’t recover the stolen goods!
The pensions debacle is a national disgrace. The Complaints Commissioner is to be commended for her report and the Legislators now need to show some real backbone and shine a light on the muck under the rock. Employers who steal from their staff must feel the full weight of criminal sanction and asset forfeiture. Prosecute and convict. Name and shame. It is as simple as that. Just get on with it.
There are many good businesses out there suffering because of bad businesses … before we start trying to shut down businesses let’s find out who are the good businesses and bad businesses first … how do we do that … here’s a proposal, does the business have any kind of financial statements or proper record keeping? There are many good businesses out there that are set up properly but are simply not making enough sales right now (because of a down world economy and diminishing Cayman population), are having collection problems, and are competing against unscruptulous business owners that are operating at below real costs. So should we fine those good honest business owners that are fighting a losing battle?
The focus needs to be on ensuring businesses are legitmate and not just a fronting business. Let’s get a head count on the number of businesses in our country first, unfortunately T&B can’t do that right now.
Otherwise all legitmate small businesses should just shut down and go work for Dart and let the unscruptulous business owners take over so they can bring costs down for all of us on the backs of third world cheap labor. Maybe let’s bring the indianshere to work for $2 per hour and cut the filipinos out, who cut the jamaicans out, who cut the caymanians out ….
Ok Mr. Minister since this pension law needs to be enforced can we as Civil Servants have ours up to date ????
A list of shame. Publish the name of the offending companies.
Top of The List – CIG
Good job Rolston. Not!
All you are doing is adding to the bureacracy that Mac is blaming on the civil servants.
Removal/suspension of a T&B license for violating the Pension’s Law only means there will be one additional charge if it ever reaches the Courts; operating a business without a T&B license.
How bdoes that help the people who have been robbed of their pension?
Or alternatively that the companies stopped doing business and therefore had to lay off all their employees. Real smart move in a recession.
Let us hope that these new laws, fines and restrictions will apply to the Govenment and that they will be bringing the civil servants pension fund up do date as they are manadted to do and that they will make monthly payments on time. Government always fins a way to get themselves out of doing what the private sector has to do – like the public service management law that exempts them from paying overtime and public holiday pay and taking away timein lieu from those that have already earned it – government does not have to pay this but they have laws that force the private sector to pay. Why is it that all these laws are for the private sector and not for the government.
Until there is a strong enforcement arm attached to the T&B Board nothing will change. Futhermore, the other entities, that is National Pensions Office, Health Insurance Inspectorate (or whatever their name is) must begiven the resources to do their job rather than depending on other agencies, eg. T & B and Immigration to enforce their laws through threats! It is ludicrous!
They’ll just get go to court and get the license suspensions tied up and when that string is played out will incorporate new entities and fold the old ones. A couple of lawsuits need to be brought and a few examples made (with fines on top of the stolen contributions) to establish that the government is serious.
Good!
Is the problem that the current system has no means for enforcement or is the problem that the LAWS ALREADY IN PLACE are simply ignored by employers and enforcers (the government)? Will this new system demand that the laws are enforced or is this simply another waste of money by a self-indulgent bureaucracy?
Finally! Thank you – please do this immediately. Cabinet directions to the Boards is all it takes.
Good one Rolston, take away the T&B licence then there will no longer be any business whatsoever so how does one ever get the pension owed. Most of the businesses that are in arrears are there because of the state of the economy albeit we know there are some unscrupulous companies out there as well.
Have you ever stopped to think what businesses are going through in this recession and what the costs ar?. They are forced by law to pay out monies for pension plans that everyone knows are complete and proven failures. The only people making money from pensions are the pension providers themselves.
Our money is not even invested partially in our own country. We invest millions maybe even billions of dollars every year in some other country’s(mainly the USA) economy through our pension payments and the government thinks that should help grow our economy and keep our businesses afloat..COMPLETE NONSENSE!!! Don’t they even take a look at some of these pension plans and see how much of our hard earned money has just been thrown away to these vultures. Ask the ordinary person of the street for a copy of his last pension statement and you will see. I have to beg and plead with my pension provider every three months just to get a statement for my employees and when I get them they are not current and in most cases from the last quarter of the year…with of course, you know it…colossal losses.
Rolston you should be building a bridge to businesses to help those that have legitmately fell behind because of hard times. Many times, it’s either you shut down and put a lot of people out of work or miss a pension payment and keep the majority of them working..
Rolston, businesses need help not threats.. The UDP government has significantly raised the cost of doing businesses in a worldwide recession. Everything from import duty to the cost of gasoline and work permits has increased in some cases threefold since you have come to power. I, like everybody else, realise that the government needs to raise revenue but if raising the revenue of the government ( which doesn’t lead by example by the way..ie bloated civil service) means shutting down most of the private enterprise than what is left but anarchy, crime and disilusionment. We see that happening as plain as day right now.
This is the final nail most of us businesses need in our coffins. Rolston, I implore you and the UDP government though to come up with innovative ways of spurring on the economy..or maybe even reverting to some conventional ways like reducing duty and other costs of doing business so that some businesses will stay alive through the recession.
Thank you 04:23,
You said it all, these employees dont understand the hardship the small business are going through just to stay alive.
What Rolston needs to do for his people is to remove the word Mandatory from the law."which states, all business must contribute to the pension scheme".
Our problem from the beggining of time, is that all business are umbrella under one set of regulations and laws of the land , this is totally insane, the small business cannot compete with the large companies, we cant dictate our profits, the competitions has become too unparalleled.
Stan
So, you’d prefer your hard earned cash invested in th Cayman economy? What project would you like – Turtle Farm?
Fact is the only practical way is to create a fund of publicly traded Cayman compnies – and the choice is tiny: Cayman National and CUC and so on. No point allowing share issues by little start-up businesses – it just wouldn’t work in this tiny islands.
Individuals can choose how their pensions are invested. If you don’t want risk ask for a cash fund. Stop bleating that pensions are bad – a good many Caymanians are going to have to rely on their pensions in future.
BritPop
What is so wrong with investing some of our money in our own country…What is wrong with investing in Cayman National or CUC. They are profit making businesses and in the case of CUC we are assured a profit legalized by the Cayman Government. Why does all of it have to go to the recession riddled USA?
You say that a good many Caymanians will be needing pension and I don’t disagree with you but there are many retired now and working two and three jobs because their pension money was wasted away by these pension providers. The ones coming later will have less based on the current trends.
When a man has no control of his hard earned money that causes serious problems particularly when the government legislates that it is okay for these so called pension providers to charge exorbitant fees and lose or money without any penalties or insurance. In fact it makes me very upset and angry.
I have never heard of one ordinary Caymanian coming on here and saying that they are living comfortable of their pension after retiring. If you know of one ask him or her to come forward, even if anonymously.
My pension plan continues to lose money and I can’t do a damn thing about it. I can’t complain, I can’t afford to move it because even if I could afford the further losses the other pension providers are not that better, and I can’t even sue them for losing my money because my government has legislated(forced) me to give my money to them whether or not I like what they are doing with it. I don’t think that this is what pensions are really supposed to be about.
The government really need to take a more serious look at what is going on with these pension plans. It is not just the employers that are taking from the pension providers it is the pension providers themselves.
This is just more legislation to ensure that these failed pension providers are guaranteed access to our funds. I guess until somebody has the cajones to stand up to them and demand better, we will all remain helpless and continue to throw our hard earned dollars down the drain.
I look at the situation sometimes and think that maybe it is better for the employers to keep it, at least, then I know it’s recirculating in Cayman and in then again in the cases of the unscrupulous ones they could be investing in other places as well. I just can’t win!
I encourage you to speak to the other pension providers out there and obtain information about their returns and plans. The 6 multi-employer plans are:
– BritCay 949-8699
– British American 949-5089
– Cayman National 640-9268
– Chamber 914-5599
– Fidelity 914-2180
– Silver Thatch 943-7770
The Pensions Laws started in 1998. There is no way that someone retiring today will have enough to retire given they’ve only invested for the last 12 years. Pensions are meant to be long term investments and you need to invest over a 30 to 40 year period. With the current retirement age set for 60 and the current contribution rate set at 10%, people are still not going to have enough to fully retire on.
The alternative to having a pension is to install a tax system so that the Government can provide a social security system. Who would you rather rely on to provide you with funds during your retirement years? The Government through social assistance or pension plans where the funds are managed by professionals within the Investment industry.
I really hope that you call around and speak to the other pension providers. I think your opinion may change.
The pension funds should be used to build our country’s major infrastructure projects. The Government should be able to borrow from the pension providers to raise capital for the dock, the airport, the roads, etc.
Ah, let’s not invest in our country, let’s put it in another country so that it can get lost and the pension providers can say oh well, better luck next time ….
And while our money is getting lost aboroad, let’s let Dart do all the infrastrure projects for us since he is the only one writing the cheques now ….
"Most of the businesses that are in arrears are there because of the state of the economy…"
You are wrong. Most of the delinquent employers have been delinquent for quite some time. Many (if not most) are unscrupulous. Many (if not most) are well aware that they are breaking the law and that there are likely no consequences. Maybe Rolston will have better luck in following through with sanctions against those who are non-compliant.
"…for pension plans that everyone knows are complete and proven failures for pension plans that everyone knows are complete and proven failure…"
Wrong again. Some pension plans have lost money, but not all. Do your research. They all lost money in 2008 when the entire world entered the same recession you were bemoaning for local businesses. The magnitude of the losses was bigger than it needed to be because of the restrictive investment rules imposed by the national pensions law that force pension funds to be too heavily invested in equities (the area hardest hit in the world wide recession).
"…I have to beg and plead with my pension provider every three months just to get a statement for my employees and when I get them they are not current and in most cases from the last quarter of the year…with of course, you know it…colossal losses…"
If this is true, then you need to look for another pension provider. Do your research, and educate your employees. According to the law, it is the employees who decide which pension fund to invest in (by majority vote). If you’re not happy with your current provider, explore others. My pension provider does not have the issues you describe in your statement above.
"…Many times, it’s either you shut down and put a lot of people out of work or miss a pension payment and keep the majority of them working…"
If you have missed one or two payments, don’t worry – there are 600+ other employers who are well ahead of you on the delinquency list. That should give you plenty of time to restructure your business and get current with your pension payments.
For individuals, make sure your employer is paying what they are obligated to pay by law. Pensions are a part of doing business in the Cayman Islands, so a business plan has to include costs for pensions. Employers who are not paying pensions for their employees are in violation of the pensions law – simple as that. Even worse, if the employer is taking a 5% deduction from the employee and STILL not making a pension payment for that employee, they (employer) are now in violation of the pension law and criminal law for theft and/or fraud. Employers, you have stolen from your employees – shame on you.
if it’s true that 600 plus employers are deliquent in their pensions, isn’t that a sure sign that there might be something a bit more significant wrong other than these employers just keeping the funds for themselves..
There are many businesses out there who make the deductions every pay day for pension from the employee’s salary but DO NOT pay over the deducted amount to the pension provider….that is down right STEALING from the employee, in addition to the employer’s contribution that they also fail to pay over…..they are thieves.
to Anonymous (not verified) on Tue, 09/21/2010 – 04:23
i don’t know who you are but you should consider running in the next elections.
i am a young caymanian struggler, and i totally understand what you said.
I’m not sure this really adds much to the existing enforcement powers.
When I researched this problem back in 2007 attempts by the NPO to block T&B licences and work permits for defaulting employers were allegedly being frustrated by the failure of other government entities to cooperate. My understanding at the time was that these moves did not really need new legislation because provisions within the existing rules could be used. Why the rules weren’t applied is open to speculation but I think most of us can offer an educated guess.
It’s all very well to suggest solutions and penalties but there has to be a willingness to go down the enforcement route and that, rather than failings at the NPO, has always been the problem.
As I’ve said before, the OCC report contains nothing that the NPO haven’t been advocating for some time – it just summarises it all in a public document.
Let me give you insight into one industry as a classic example- Construction!
I can assure you that close to half of construction workers are paying for their own work permits and that they are receiving incorrect or even no pension contributions.
But you know something, you are dealing with workers from places who don’t respect the rule of law- and because of the imported poverty factor, they are only too glad to pay for their permits and bypass some of the rules that are there to protect them, just so they keep a job.
Clearly we have too many people in business in certain industries like construction and as a result you have people cutting alot of corners to stay in business. I have seen it in person and I agree with T&B Licences being suspended for offending employers.
Employers who make workers pay for permits should also lose their T&B Licence.
Bad employees, bad bad employees! Disrespecting the rule of law by paying for their permits, bypassing all those rules!
Poor employers. Poor poor employers. Having to hire all those bad employees who pay for their own permits. What’s a poor "honest" employer to do?
Good grief.
You seem to have misread the post. It says: "Employers who make workers pay for permits should also lose their T&B Licence".
Well its about time!!!!