Self-employed and ‘brick and mortar’ businesses pose greatest challenge for ABSSB, director says

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By Elesha George

[email protected]

“Brick and mortar” businesses are reportedly the most problematic industries to regulate and the most likely to be taken to court, when it comes to the collection of Social Security contributions in Antigua and Barbuda.

Those kinds of businesses include banks, supermarkets, gas stations, and grocery stores, among others.

“Recovery generally tends to be with the formal sector — those persons who are employers in the brick and mortar type businesses. Those are the ones that you have to enter into a lot of civil recovery for,” Executive Director of the Antigua and Barbuda Social Security Board (ABSSB), David Matthias told OBSERVER media.

He said that in most instances, the large volume of non-payment is as a result of cash flow problems, as most employers would prefer to pay their workers and withhold remittances from Social Security to meet their wage bill.

“The challenge for Social Security is to make sure to recover from that employer because indeed he may have provided their salaries, but he is leaving them uncovered should something else untoward happen to them,” Matthias explained.

Meanwhile, self-employed persons as well as persons involved in formal employment mainly construction, are recognised as the most difficult to police. Self-employed persons, he added, are conversely the group of workers who rarely ever claim sickness benefits “because if they don’t work, they don’t eat”.

“My field officers have to be in the field regularly because construction could occur overnight. Invariably, what we observe is that most contractors have now begun to not have formal employment contracts with their crews. They’re now treating them as independent contractors.”

This, he said, requires a lot of market intelligence to collect data because of how quickly tradesmen move about. They are also faced with the growing challenge of having to differentiate, to contractors in particular, what makes a worker truly independent.

Recognising that not everyone who is employed is registered with the scheme, Matthias cautioned of a culture of avoidance of payments that needs to be broken.

“Persons believe that because they’re only working somewhere part time, ‘I don’t need to be paying Social Security on that’, and the challenge for us is to let the person know, ‘you’re only doing yourself harm’.”

Matthias added: “It’s cumbersome and tedious, which is why I wish persons would respect the fact that it is not easy for the inspectors to sift through all these different arguments that are made by varying employers day in day out, as to why it is this person is responsible for their own contributions.”

The 2015-2017 statistical abstract – the most recent publication by the department, shows that self-employed persons have successively dominated the type of employment within the state. 

In 2015, 460 self-employed people registered under the Social Security Scheme; 424 in 2016, and 449 in 2017, respectively.

Meanwhile, the scheme continues to find ways around the collection of on-time remittances, even while the total number of active contributors for the period 2018/2019 is estimated near 44,000 persons.

Acknowledging the continued growth in numbers, Matthias said, it does not take into account the total number of those registered under the scheme.

“What we do at Social Security is that we discount that amount because at the point of registration, persons would indicate whether they are actively employed or they are just simply getting registered for the purpose of having ID,” he explained.

When calculating the figures for those actively insured, a discount must be applied for a number of people who are unemployed.

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