How Does It Benefit Me?
The system has been found to be mutually advantageous to both employers and employees. It has relieved employers of the financial obligation of paying the wages of employees who are unable to work, while simultaneously meeting the wages of temporary or replacement workers. This is done provided that the employer and employee make regular contributions to the NIC.
An employer is assured that his employees will receive a pension from the National Insurance Corporation upon retirement at no additional cost to himself once he has made the necessary National Insurance Corporation contributions.
For maximum use of the benefits, you must know something about the operations of the National Insurance Corporation, your rights and your obligations.
Who Should Register?
If you, individually or as a group, decide to start a business where at least one-person will be employed – either on a part-time or full-time basis – then you must register with the National Insurance Corporation within seven (7) days of hiring the first employee.
How Do I Register?
There are different ways in which an employer can register. You must select the one which fits your particular situation.
- An application for registration of a Business Name as an employer must be supported by the Statement of Particulars and Certificate of Registration of the business name.
- An application for registration of a Company as an employer must be supported by the Certificate of Incorporation, Notice of Directors and Notice of Registered Office.
In the absence of these documents registration must be made in the name of the individual (the employer). A registration number will be issued.
Your Registration Number
The number is your business’ permanent identification. It never changes and is never reissued at the cessation of a business whether temporarily or permanently.
It must be quoted on all correspondence between you (the employer) and the National Insurance Corporation office.
How Do I Register My Employees?
As an employer, you must ensure that all your employees are registered. Further, before hiring you must insist that all prospective employees produce their National Identification (ID) Card on which their National Insurance Corporation number is located on the top right hand corner.
An employee who is not a St. Lucian national is issued a separate card. Please note that these cards bear an expiration date.
Failing that, each employee must complete the Employee Registration Form (Form R3). The employee must furnish the following information:
- Full name
- Date of birth, which should correspond with his/her birth certificate
- An accurate home address where the employee can be contacted when he/she claims a benefit
- Employee’s signature or mark if he/she cannot sign
- Valid forms of identification, e.g., driver’s permit, passport etc.
- Work permit, CARICOM Skills Certificate or any other relevant document (for non-nationals)
If the employee’s name has changed as a result of marriage, remarriage or otherwise, he/she would also need to present the original document which supports the new name.
The completed application form must be submitted at the nearest National Insurance Corporation office.
Do not have your new employees working before he/she produces a National Insurance Corporation number. In the past it created a number of problems and it is an offence against the law.
What Are My Contributions?
Employers are required by law to pay contributions on behalf of all employees. Contributions are due from the start of employment. They are to be paid either on, or before the seventh (7th) of the month following that month to which the contribution relates, e.g. contributions for June must be paid on or before July 7th.
Who Pays the Contributions?
Contributions are a half-and-half endeavor between the employer and employee, where the employee’s contribution is 5% of his/her gross wages/salary, while the employer provides the other 5%.
What Are Gross Wages?
For the purpose of determining the gross earnings, the basic salary and the following payments made to an employee must be included:
- Overtime pay
- All allowances
- Commission/profit on sales
- Payment on account of night/shift work
- Service charge
- Holiday pay
- Travelling allowances in excess of $500.00 a month
The following are NOT to be included in gross earnings and will NOT attract deductions:
- Christmas bonuses
- Annual production bonuses
- Severance payments
- Terminal Gratuities
- Payments made in Lieu of Leave
The following payments are excluded:
- Meal Stipend
- Uniform Stipend
- Laundry Stipend
- Employee discounts for purchase of merchandise for one’s own use
- Reimbursements for expenses incurred which ordinarily would be expenses incurred by the business
How are Contributions Paid?
Contributions are to be submitted to the National Insurance Corporation office with the Form C3 provided for that purpose.
An official receipt will be issued after verifying the amounts paid and the period to which the payment applies.
Contributions may also be sent through the mail by cheque made payable to the National Insurance Corporation; a receipt will be mailed in due course.
National Insurance Corporation contributions should only be paid in the manner outlined above; never to any person or institution on its behalf.
What Are My Returns?
Further to the monthly contributions and in order that employees receive credits for the contributions made on their behalf and in order to keep employee contribution records up to date, employers must complete and submit the Form C3 monthly.
What Is the C3 Form?
The Form C3 is dispatched monthly by the National Insurance Corporation office. The form will have the employer’s name, address and registration number.
It also bears the number and names of employees working at the date the last returns were submitted. The employer must delete the names and numbers of persons no longer employed and add the names and numbers of any new employees where applicable.
Figures reflecting both employer and employee contributions must also be entered (5% employee plus 5% employer). The figures entered are totaled and must agree with the contributions paid for that month to which the Form refers.
All returns must be submitted either by mail or directly to any National Insurance Corporation office.
What Are the Benefits?
Employees are offered several benefits once they are registered and contribute to the National Insurance Corporation.
They can qualify for:
- Maternity Allowances or Grants
- Sickness Benefits
- Hospitalization Benefits
- Employment Injury Benefits
- Invalidity Pensions or Grants
- Retirement Pensions or Grants
- Survivors’ Pensions or Grants
- Funeral Grants