Failure to pay NIS deductions to the scheme is a criminal offense – Nandlall reminds employers

A landmark case in local courts has sparked new debate over employers’ deductions of their employees’ contributions to the National Insurance Scheme (NIS) and instances of a failure to pay over those deductions to the scheme.

And though already in the public domain, Attorney General Anil Nandlall has used the occasion to remind 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 offense.

“Because we know, we know that many employers are deducting NIS from employees but are not remitting those payments to NIS and that is an offense.

“A criminal offense under the laws,” Nandlall said during his Tuesday night ‘Issues in the News’ commentary on his Facebook page.

In November 2023, High Court Judge Damone Younge ordered NIS to pay 60-year-old Shariff Zainul his old age pension after it was found that he had worked with Toolsie Persaud Limited (TPL) for several years and that contributions had been taken from his salary for social security.

The issue is that the NIS has now appealed the ruling, refusing to make the payout to Zainul on the insistence that his employer, Toolsie Persaud Limited (TPL), never remitted those contributions to the scheme.

While some have said the appeal is shocking, the AG fears that if the ruling stands, it will open the floodgates for suits against the scheme, a situation that can lead NIS to bankruptcy.

In the first instance, Nandlall confirmed that the appeal was not filed by his Chambers.

“The issue as I understand it and the reason or the filing of the appeal has very little to do with monies awarded to individuals.

“The issue is that the employer was not made a party to proceedings. The gentleman sued NIS only and did not join Toolsie Persaud Limited in the proceedings.

“The NIS records show no remissions were made by the employer to NIS,” Nandlall said in support of the appeal.

Zainul had records that he produced to the Court to establish that deductions were made from his wages/salaries.

Nandlall insisted, however, that the NIS records do not establish that those deductions were paid over.

“…and that is the problem with the case.”

“If this decision is allowed to go unchallenged then it opens the floodgate where everyone will sue NIS and not their employers and NIS will have to pay although NIS did not receive any remissions of the payments made by the employee to the employers,” Nandlall explained.

Further, Nandlall insisted and rejected criticism that NIS was refusing to pay the man’s entitlement.

He said: “It’s about every employee whose payment was deducted but not transmitted to NIS… they too will have a claim and NIS will have to pay moieties it never received.”

This the AG regarded as a serious problem, one that could bankrupt the NIS and believes this is a good enough reason and consideration that caused the appeal to be filed by NIS.