By John Myers, Jr. Staff ReporterEMPLOYERS AND their employees began contributing more to the National Insurance Scheme (NIS) on Wednesday, October 1.
The effective rate of contribution will now be calculated at five per cent of the first $500,000 of employees' salary. This amount will be split equally between the workers and their employer.
Employers are required to make the necessary adjustments to their payroll systems to facilitate the change. The new rates became mandatory after the Government adjusted the insurable wage ceiling from $250,000 to $500,000 as part of efforts to raise funds for the Ministry of Health's newly formulated National Health Fund (NHF). The Government is expected to use approximately $800 million from the increased intake to finance the NHF. This will also result in an increase in benefits received by the 77,000 pensioners.
CHANGE CRITISISED
However, the change has attracted much criticism from employers and trade unions. Following the Government's announcement in April that the contribution would be increased, both expressed concern about the effects the increase would have on the labour force. In an interview with The Gleaner in April, Jacqueline Lloyd, executive director of the Jamaica Employers Federation (JEF), said employers were not pleased with the move and were expressing concern about the effects. On Tuesday, JEF's chairman, Herbert Lewis, said "We haven't had any feedback (from employers) to say they are not ready (but) I'm sure the employers will do whatever is necessary. It is going to mean a little bit more problem for them but I'm sure they will adjust."
He said JEF was still not in agreement with the increase as it would impact negatively on work force. "We still feel that way," he said.
The effective date for the calculation of weekly rates is October 6 while calculations for fortnightly rates is October 13.
