the labour market potential of nis databases in six ... · i the labour market potential of nis...

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The Labour Market Potential of NIS Databases in six Caribbean countries - An Evaluation

"Preparation of this item was funded by the United States Department of Labor under Grant Number E9K10103. This

document does not necessarily reflect the views or policies of the U.S. Department of Labor, nor does mention of trade names, commercial products, or organizations imply endorsement by the U.S. Government."

ILO Subregional Office for the Caribbean

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Copyright @ International Labour Organization 2003 First published 2003 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Publications Bureau (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland. The International Labour Office welcomes such applications. Libraries, institutions and other users registered in the United Kingdom with the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP [Fax: (+44) (0)20 7631 5500; email: [email protected]], in the United States with the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923 [Fax: (+1) (978) 750 4470; email: [email protected]] or in other countries with associated Reproduction Rights Organizations, may make photocopies in accordance with the licences issued to them for this purpose. ___________________________________________________________________________ The Labour Market Potential of NIS Databases in six Caribbean countries- An Evaluation Port of Spain, International Labour Office, 2003 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. ___________________________________________________________________________ Printed in Port of Spain, Trinidad

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Foreword Statistics and other summary information based on administrative records are often underutilized as a basis for information about the structure and developments in the labour markets in which they are generated. In small developing countries, including many in the Caribbean, where it is often neither practical nor affordable for Governments to carry out frequent surveys to generate reliable information, this is an option which cannot be ignored. However, at the same time, it is well recognized that because these data are recorded as part of an administrative process, there will be consequences for quality elements such coverage, timeliness, reliability and consistence. The question then becomes to what extent the benefits of using these data compensate for the shortcomings. This is the question posed in the Caribbean Labour Market Information System (CLMIS) project in relation to the data generated by National Insurance Schemes and the extent to which, despite any shortcomings, they can provide useful, up-to-date and reliable labour market information. This report presents the conclusions arising from assessments undertaken in six Caribbean countries by a team of dedicated National Specialists under the guidance of Mr. Robert Pember of the ILO Bureau of Statistics and their National Lead Agencies. In this connection, I wish to acknowledge the contributions made by Lennox McCartney, Director and Tami Francis, Statistical Research Analyst, National Insurance Board, Bahamas; Steven Mayers, Director, Dominica Social Security; Ashton Frame, Director and Dorset Cromwell, Manager of Statistics, Research and Planning, National Insurance Scheme of Grenada; Pacheco Romer, Director and Zaida Lake, Statistician, Central Bureau of Statistics, Netherlands Antilles; Emma Hippolyte, Director, Albert Cenac, Statistics, Training, Research Manager and Paul Kallicharan, Research, National Insurance Corporation of Saint Lucia; and Reginald Thomas, Director and Duane Allen, Research Officer, National Insurance Scheme of St. Vincent and the Grenadines. The work accomplished at the national level leads us to conclude that increased use can indeed be made of the National Insurance Schemes as a relatively inexpensive and reliable source for labour market information. It is my hope therefore that greater attempts will be made by these countries to exploit this relatively untapped source of labour market information. I hope too that this report will serve as a guide to other countries in the sub-region and elsewhere on how they too can take advantage of the potential of their National Insurance Schemes in their national labour market information systems. Grace Strachan Director ILO Sub-regional Office for the Caribbean

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Contents

Foreword iii Introduction: National Insurance Schemes: A Potential Source for Labour Statistics 1

1. Background 1 2. Strengths and Limitations of using NIS data 2

3. General information that can be produced from the NIS databases 4

4. Recommendations for improving the capability of NIS to produce labour statistics 5

1. The Bahamas National Insurance Board 8

1.1 Background 8 1.2 The current LMI database: Conceptual Issues 11 1.3 The current LMI database: Data Collection issues 15 1.4 Recommendations 18

2. Dominica Social Security - Dominica 21


3. Grenada National Insurance Scheme 34


4. Old Age Pension Scheme - Netherlands Antilles 47


5. Saint Lucia National Insurance Corporation - Saint Lucia 57

5.1 Background 57 5.2 The current LMI database: Conceptual Issues 60

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5.3 The current LMI database: Data Collection issues 64 5.4 Recommendations 67

6. St. Vincent and the Grenadines National Insurance Scheme 71

6.1 Background 71 6.2 The current LMI database: Conceptual Issues 73 6.3 The current LMI database: Date Collection issue 77 6.4 Recommendations 81

Annexes 1. ILO Questionnaire to assess the ability of the NIS to provide LMI 85 2. Hardware and software in use at the NIS 95 2a. Bahamas National Insurance Board 95 2b. Dominica Social Security 95 2c. Grenada National Insurance Scheme 95 2d. Netherlands Antilles Old Age Pension Scheme

(Information not available) 95 2e. Saint Lucia National Insurance Corporation 96 2f. Saint Vincent and the Grenadines National Insurance Scheme 96

3. Tables currently produced by the NIS Statistical Unit 97 3a. Bahamas National Insurance Board 97 3b and c. Dominica Social Security and Grenada

National Insurance Scheme 97 3d. Netherlands Antilles Old Age Pension Scheme 97 3e. Saint Lucia National Insurance Corporation 98 3f. Saint Vincent and the Grenadines National Insurance Scheme 98

4. NIS Contributor Forms 99 4a. Bahamas - Contribution Statement Form C10 99 4b. Dominica - Contributions remittance Form C8 100 4c. Grenada - Remittance Form 101 4d. Saint Lucia - Form C3 102 4e. St. Vincent and the Grenadines - Form C5 103 5. Draft tables to be produced 106 5.1 Number of paid employee contributor persons and average monthly wage earnings by sex, institutional sector and industry 104 5.2 Number of private sector paid employee contributor persons and

average monthly wage earnings by sex and employment size of enterprise 105 5.3 Number of paid employee contributor persons and average monthly wage earnings by age and sex 106 5.4 Number of private sector paid employee contributor persons and

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average monthly wage or earnings by occupation and sex 107 5.5 Distribution of paid employee contributor persons in monthly wage earning groups by institutional sector and sex 108

6. Statistical Annexes 109 6a. Bahamas Employed persons NIB vs. LFS 109 6b. Dominica Employed persons NIB vs. LFS 110 6c. Grenada Employed persons NIB vs. LFS 111 6d. Netherlands Antilles (Curacao) Employed persons NIB vs. LFS 112 6e.St. Lucia Employed persons NIB vs. LFS 113 6f. St. Vincent and the Grenadines Employed persons NIB vs. LFS 114 List of Tables 1. Labour Market Indicators important to the NIB, Bahamas 10 2. Personal Registration Data Sheet, NIB, Bahamas 13 3. Registration Data Sheet for Business Units, NIB, Bahamas 14 4. Information updated in the database, NIB, Bahamas 16 5. Labour Market Indicators important to the Dominica

Social Security 22 6. Personal Registration Data Sheet, Dominica Social Security 26 7. Registration Data Sheet for Business Units, Dominica Social

Security 26 8. Information updated in the database, Dominica Social Security 29 9. Labour Market Indicators important to the NIS, Grenada 36 10. Items recorded for each contributor person registered, NIS,

Grenada 40 11. Items recorded for each enterprise contributor registered, NIS,

Grenada 40 12. Information updated in the database, NIS, Grenada 43 13. Items recorded for each contributor enterprises registered,

OAPS, Netherlands Antilles 50 14. Registration Data Sheet for Business Units, OAPS, Netherlands Antilles 51 15. Information updated in the database, OAPS, Netherlands Antilles 53 16. Labour market indicators important to the NIC, St. Lucia 58 17. Personal Registration Data Sheet - NIC, St. Lucia 62 18. Registration Data Sheet for Business Units, NIC, St. Lucia 63 19. Information updated in the database, NIC, St. Lucia 66 20. Labour Market indicators important to the NIS, SVG 72 21. Personal Registration Data Sheet, NIS, SVG 75 22. Maximum monthly and weekly earnings ceilings by year of

adjustment, NIS, SVG 76 23. Registration Data Sheet for Business Units 76 24. Information updated in the database, NIS, SVG 79 25. Active enterprises in by time lag between submission of the

contribution or C5 form and the month for which the contributions were due in 2002, NIS, SVG 80

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List of Figures 1. Organizational Structure of the NIB, Bahamas 9 2. Organizational Structure of the NIS, Grenada 35

LIST OF ACRONYMS AND ABBREVIATIONS CBS Central Bureau of Statistics CLMIS Caribbean Labour Market Information System CSO Central Statistical Office DSS Dominica Social Security ECCB Eastern Caribbean Central Bank ILO International Labour Organization ISCO International Standard Classification of Occupations ISIC International Standard Industrial Classification of all Economic Activities ISSA International Social Security Association LMI Labour Market Information NI National Insurance NIB National Insurance Board NIC National Insurance Corporation NIS National Insurance Scheme(s) OAPS Old Age Pension Scheme RO Revenue Office SVB Social Security Bank

Introduction __________________________________________________________

National Insurance Schemes: A Potential Source for Labour Statistics

1. Background National Insurance Schemes (NIS) have the potential to provide useful statistics on employment, labour turnover and average monthly wage earnings classified in various ways (by sex, age, institutional sector, industry, employment size of enterprise and perhaps even by occupation). They also have the potential to provide useful statistics on beneficiaries, contributions and beneficiary payments. These statistics can be produced as at a particular point in time (for example, employment as at 31 December of a particular year) or in respect of a period (for example, number of employees retired during the 12 months ending 31 December of a particular year). The potential of National Insurance Schemes as a source for labour statistics was recently explored by the Caribbean Labour Market Information System (CLMIS) project, a project of the International Labour Organization, Subregional Office for the Caribbean with funding from the United States Department of Labor. The project is aimed at producing more reliable, timely and internationally-comparable labour market information that would guide the development of more effective labour and employment policies as the Caribbean region prepares for the challenges of globalization. In its quest to collect relevant and timely labour market information for the entire Caribbean region, the project identified inherent gaps in the regularity of the labour market information, particularly in countries with smaller economies. Larger countries such as Jamaica and Trinidad and Tobago already had well-established labour force surveys and were able to produce labour statistics on a regular basis. Thus, in an attempt to fill the gap in the irregularity of labour market information in the smaller countries, the NIS databases in some of these countries were explored as a potential alternative source for statistics. A review of the administrative databases of the National Insurance Schemes (NIS) in six Caribbean countries namely the Bahamas, Dominica, Grenada, Netherlands Antilles, Saint Lucia and St. Vincent and the Grenadines was conducted by National Specialists within each of the respective organizations to assess the NIS’ ability to provide reasonably comparable labour statistics. The review was guided by Mr. Bob Pember, International Specialist at the International Labour Organization (ILO), Geneva. The main conclusion of this review, which was formulated during the meeting of national specialists from participating countries, was that the administrative databases of the NISs can be used to provide information on:

Total paid employment and wages, in the formal or registered sector by sex, and by institutional sector, industry and occupation.

Based on the scope of this alternative information database, this approach excludes the self-employed sector, as well as those in the informal sector (whether they are in paid employment or self-employed). It also excluded collecting and producing information on the unemployed population or other beneficiaries. However, countries that currently have the information base to produce more than this

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common data set were encouraged to do so. In producing the additional information, the ILO has agreed to provide technical assistance as far as available resources would allow. 2. Strengths and Limitations of using NIS data In his contribution to this report, Bob Pember, the International Specialist who provided methodological guidelines and support to the national specialists, highlighted some strengths and limitations of the NIS as discussed below. At the onset of the exercise, certain strengths of the NIS were apparent. The administrative records of the NIS can be accessed with minimal cost, as they already exist. No additional work was therefore required in collecting data and there was no additional burden on the business community. The NIS records also cover all of the employees who have contributed to the Scheme. Despite these inherent strengths, however, there are several issues which need to be carefully considered if the NIS databases are to be used as an alternative source for labour statistics. Of particular relevance to the Caribbean region are the following: a. Scope: The NIS rarely covers all employed persons or even all paid employees. Often

particular categories (such as casual/temporary workers, junior workers, workers in small enterprises, trainees, employees with high earnings, non-nationals) are excluded from the legislation, or may be under-registered even if the legislation covers them in theory.

In the Caribbean, it was concluded that most countries could produce statistics relating to permanent paid employees1 in the Government and private sectors. However, gaps remain (for example, the NIS in the Bahamas does not cover employees with earnings over Bahamas Dollars 400 per week).

b. Geographic scope: The NIS would not normally have restricted geographic scope, but technical matters (such as only partial computerization of contributor records) may limit the accessibility of data to urban areas (e.g. Guyana).

c. Definitions: The concept and definition of “employee” and “earnings” may differ between one set of national legislation and another and this will affect the comparability of statistics between countries of the sub-region.

In the Caribbean, the NIS coverage of “employees” is generally consistent. Most countries exclude juniors (16-21 years), but the Netherlands Antilles also excludes paid apprentices/trainees, non-nationals and casual/temporary workers. In the comparison of results, users would need to be advised of the different coverage in a footnote.

d. Business Unit data: For most NIS, data are held for each contributor/beneficiary (person) as well as for each “business”. However the business unit is usually the enterprise (legal entity) rather than the separate establishments (locations) of enterprises.

1 The income ceilings in the Eastern Caribbean countries are relatively high, covering almost all paid employment (See national reports).

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In the Caribbean2, the NISs obtain reports and store “business” data at the enterprise level.

e. Data content: The data obtained in respect of each contributor and each business vary from country to country, and are usually determined by legislation or the administrative process.

In respect of contributors, data on earnings are likely to be collected since the level of contribution varies with earnings (but will not be accurately recorded if the earnings are outside the minimum or maximum range for determining contributions). Occupation data is often not collected, or if collected is not coded or updated (except when the contributor changes employer).

It is also important to recognize that analysts3 can only access NIS data that are available on the NIS database. In some cases, data may be reported to the NIS but are not transferred into the NIS database (or not coded in such a way that can be used in statistical processing), and are therefore not accessible for statistical analysis.

In the Caribbean, the data items of statistical interest that are commonly available for analysis on the NIS databases include the following:

For each enterprise: The total amount of NIS contributions is available for all countries. However, for all other data items of statistical interest, one or more countries did not hold the following data:

i. Number employed (not in Netherlands Antilles)

ii. Total payroll (not in St Lucia, and insured portion only for the Bahamas and St Vincent and Grenadines)

iii. Location (or province) (not in Bahamas, Grenada) iv. Industry of the employer (not in Bahamas, Dominica, Grenada or St Vincent and

Grenadines): The lack of data on this topic weakens the value of the NIS as a source of labour statistics because labour statistics are frequently analysed by branch of economic activity.

v. Institutional sector (not in Bahamas, Dominica, Grenada, or St Vincent and Grenadines, but it is expected that it would be relatively easy to separately identify non-private sector enterprises in the analysis for these countries).

For each contributor: There is no contributor data item of statistical interest that is presently available for all countries. Most countries had contributor data on (insurable) earnings – the only exception was St Lucia. For all other data items of statistical interest, several countries did not hold the following data:

i. Either (a) Identifier of employing business or (b) Employer details (the details of enterprises are available in specific countries as reported above)

ii. Age (or date of birth) (not Dominica, Grenada or St Vincent and Grenadines)

iii. Sex (not Netherlands Antilles or St Vincent and Grenadines)

2 In some countries, the NIS can produce information at the establishment level. 3 In most countries, NIS confidentiality provisions restrict access to NIS databases to NIS staff only. It is therefore assumed that these analysts are approved NIS staff.

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iv. Occupation (available only for Dominica)

v. Marital status (available only for Netherlands Antilles and Grenada)

vi. Whether paid employee or self-employed (available only for Netherlands Antilles)

vii NIS contribution (not Bahamas or St Vincent and Grenadines)

f. Double counting: In their enterprise contributor database, NIS count the same person twice if that person is employed in two jobs and pays contributions in respect of both. Although this would over-estimate the number of persons employed in a country, it is a conceptually sound reflection of the total number of jobs. The NISs take great care to prevent double counting in their individual contributor databases, primarily by assigning a unique number to each person and by demanding identification when registering or re-registering individual contributors.

However, it is still possible for double-counting to occur and the NIS should provide some measure of its occurrence. In addition, users should be cautioned in footnotes on how these conceptual issues - jobs or employed persons - are reflected in the NIS figures.

g. Timeliness: Statistics compiled from NIS databases may be untimely if the process of reporting, coding, checking and transfer to database is slow. Bahamas indicated that there was a reporting time lapse of 6 months (to obtain data for 90 to 95 percent of the contributors) and a further one month for processing - a total of 7 months total time lapse. This is likely to be typical and so statistical tables from the NIS databases should not be expected until at least 7-8 months after the reference period.

h. Updating: Data may not be updated unless associated with change in employer. Updating is especially unlikely if that data is not important to the administrative process (for example, occupation data or marital status data). One would expect that deaths and retirements from the system would be recorded since this would normally lead to the payment of benefits.

i. Continuity: Changes in legislation, procedures, resources, etc., may occur over time and cause breaks in statistical comparability. This is unavoidable and will need to be described in footnotes.

j. False reporting: Reporting may be biased to maximize benefits or minimize penalties. This is particularly the case in respect of earning levels since the amount of contribution to be passed on by the enterprise to the NIS is based on the earnings of contributors.

In the Caribbean, this was not believed to be a major problem. As stated in the Bahamas report, “The NIB provides no specific incentives for registration, timely and complete reporting. The main penalty for non-registration, false reporting, late reporting or no reporting is fines, while for the self-employed a loss of benefits is an additional penalty that could be applied.”

k. Classifications: NIS do not always use the standard national statistical classifications, but may use classifications that are appropriate to their administrative system.

In the Caribbean, occupation and industry information are not commonly included in the NIS databases, but the NIS uses international standard classifications in the cases where relevant. Other classifications (such as age) can be specified in a standard way during table generation.

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3. General Information that can be produced from the NIS databases Given these considerations and the assessment conducted, each NIS should be able to produce the following minimum amount of information:

(i) “Employment” information (vs. unemployment) (ii) Employment and Earnings information for paid employees (does not exclude countries

getting information on self-employed or informal sector employment) for both the public and private sectors.

(iii) Earnings for paid employees (to enable the production of average and distribution of earnings)

(iv) The following data items to be collected from each employer: Name; Business ID number; Location (district); Institutional sector (minimum should be Government, other public sector, private); Industry (International Standard Classification of Occupations (ISIC) Rev 3); Number employed; and Total monthly wage (payroll).

(v) The following data items to be collected from each contributor: Name; NIS identifier number Either (a) Business ID number (to permit link to the information held on the employer) or (b) location, institutional sector, industry, employment size of employer; Date of birth; Sex; Occupation; Status in employment (paid employee or self-employed); and Income from employment (wage).

In addition to this information, it is also recommended that the following set of standard tables be produced every six months (See Annex 5):

a. Table 5.1: Number of paid employee contributor persons and average monthly wage earnings by sex, institutional sector (private sector and government separately where available) and industry;

b. Table 5.2: Number of private sector paid employee contributor persons and average monthly wage earnings by sex and employment size of enterprise;

c. Table 5.3: Number of paid employee contributor persons and average monthly wage earnings by age and sex;

b. Table 5.4: Number of private sector paid employee contributor persons and average monthly wage or earnings by occupation and sex;

c. Table 5.5: Distribution of paid employee contributor persons in monthly wage earning groups by institutional sector and sex.

These tables will provide an overview of the national employment situation for the formal sector. It will be helpful for planners to have this data especially in the absence of any other period labour statistics.

4. Recommendations for improving the capability of NIS to produce labour statistics In addition to the data that can be obtained from the NIS, the following recommendations should be considered in an effort to improve the capability of the NIS to produce labour statistics. These recommendations were made at the technical meeting of national specialists held in Saint Lucia on 9-10 December 2002.

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(i) The Central Statistical Office (CSO) and the NIS aim at jointly compiling an establishment register. In this establishment register each establishment should have a unique identification number as well as an ISIC code and ideally an employment size code and location code.

(ii) NISs that decide to collect information on wages above the ceiling could consider getting information on wage intervals if information on exact wages is difficult to collect. However, ceilings should be as high as possible to permit the calculation of unbiased averages.

(iii) For each participating country, tables to be produced from the database should be run as soon as possible after receiving all or almost all of the contributions due for a specific period.

(iv) For purposes of reducing the workload of data entry as well as response burden on the employers the regular reporting forms for employers can be pre-printed with the latest information in the NIS database. The employers would then only need to supply information on changes in the existing information and new entries.

(v) Electronic submission of government employment to the NIS should be both timely and frequent. The NIS of participating countries should maintain a close liaison with the agency responsible for Government payrolls on this matter.

(vi) NISs in participating countries which currently maintain part of their records manually, need to aim at fully computerizing their databases.

Further to these recommendations, the following modifications should also be considered in utilizing NIS data: 1. Income Ceilings: National Insurance Schemes in the region have varying upper limits on

earnings above which contributions are fixed. The income ceilings in the region range from as low as 30% to as high as 95%. This reflects either explicit or implicit social policies of the governments. This is a given in labour statistical work and changes to them are beyond the scope of this CLMIS activity. However, where the income ceilings are low and where information on earnings above the ceiling is either recorded as being at the maximum or else recorded at higher levels but not well maintained, then there is an impact on the quality of the labour statistics that can be produced from the NIS databases. In particular, estimates of average earnings will be biased and earnings distributions will be constrained. A preferred solution would be to collect information on the wages above the ceiling either as exact wages or in wages brackets. This will result in a higher response burden on the employers. Other arguments to support the introduction of this measure in cases where the ceiling is low are: i) The Government and the NIS both need information on the whole income distribution to

analyse and decide on increasing or lowering the ceiling, and assess the possible effects of such changes.

ii) For purposes of actuarial analyses, this information is needed. In addition, in order to permit the calculation of unbiased estimates of average earnings, it is recommended that the total monthly wage bill of the employer should be reported (in addition to earnings paid to each contributor).

2. The reporting unit: For statistical purposes, the establishment is the preferred unit rather than the

enterprise. However, this is not always the tradition in the operations of the NIS that is concerned with the entity legally responsible for the insurance. Wherever it is possible to make a distinction in

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the database between an establishment and an enterprise by having a separate code for each establishment, this should be done. This will allow data compilation by geographic location (district or region). It would also lead to more useful analysis by industry (branch of economic activity). This is often of interest in multi-island countries. More importantly, collecting and organizing the data on the basis of establishment (physical location) will allow the NIS to analyse occupational injuries and other relevant events by the workplace or the unit of economic activity where they occurred.

3. The establishment/enterprise register and industry coding: A close collaboration between the

national statistical office (NSO) and the NIS, including collaboration in the production and maintenance of one central register of businesses should be encouraged. The NIS could inform the NSO of the closure of old businesses and the opening of new businesses, while the NSO could provide more reliable coding of industry. The task would be facilitated further if there was a unique registration number for each enterprise (and its component establishments) in the country. Coding of industry by one agency is recommended in order to avoid the situation of different agencies giving different industry codes to the same unit. Coding by the NSO is preferred because it has specialized expertise for this coding operation. This would also relieve the NIS of the burden of the coding and the updating of industry information.

4. Occupational Changes: In many countries, occupation of contributors is reported only on initial

registration and not updated. It is very difficult to keep track of changes in occupation over time and consequently the occupation data becomes out-of-date. In the optimal scenario, the company will report regularly on the job title and duties of the insured person. However, reporting on occupations is an additional burden on the employers. Some countries have considered completely recoding the occupational data at periodic intervals (every year or so). However, this would require major resources and is not recommended. The preference is that the employer provides information on the change when it occurs and that this information is then coded as it is received, thereby spreading the workload over time and ensuring that the occupation data is up-to-date. If electronic systems are put in place the response burden on the employer in updating occupational information can be reduced.

5. Occupational Wages: It is often difficult to get total income from paid employment, especially

income from gratuities. Furthermore, this is usually not the objective of the NIS. The definition of earnings as recorded in the NIS system should be clearly indicated, and the various components of the earnings concept should be explicitly stated. With reference to the discussion on the income ceiling, it is recommended that information be produced on average wages and the total distribution of wages as collected.

6. Actively insured vs. actively employed: For the purpose of labour market statistics, it is essential to

recognize and distinguish between those who are actively insured from those actively employed as at the reference period. For several reasons there will be a gap between the total number of actively insured and the total number of actively employed at a certain point in time. One reason is the late submission of contributions for those who are employed. Statistics should be ideally obtained on “current contributors who are paid employees”.

The following chapters represent the national reports of countries which assessed the capability of each of their NIS to provide labour market statistics. Each report highlights particular characteristics of each NIS with specific recommendations on how the NIS can enhance the production of labour market information nationally.

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1 _________________________________________________________________________________________ National Insurance Board of the Bahama

Tami Francis 4

1.1 Background 1.1.1 History of the National Insurance Board (NIB) The Bahamas NIB became fully operational on October 7, 1974 as a result of The NaAct, 1972. The objective of the NIB is to: • To provide Social Security Coverage, in the form of Benefit Payments to insured

dependents, against the following contingencies: Sickness, Funeral, Invalidity, MRetirement, and on the death of the family's bread-winner, Survivorship, Industriaincluding Disablement, Death and Medical Care;

• To provide a minimum level of Social Security coverage for persons who do nbenefits as of right; and

• To effectively and efficiently administer and manage the National Insurance Proin accordance with the fiduciary principles laid out in the National Insurance Acand thereby assist with the sustained, orderly socio-economic growth and decountry.

Within the framework of these objectives, the following benefits and assistances are by the different programs of the NIB: 1. Short Term Benefits

a. Sickness Benefit b. Maternity Benefit c. Maternity Grant d. Funeral Benefit

2. Long Term Benefits

a. Retirement Benefit b. Invalidity Benefit c. Survivor's Benefit

3. Industrial Benefits

a. Injury Benefit

4 Statistical/Research Analyst, National Insurance Board of the Bahamas

s

tional Insurance

persons and their aternity, l Injury,

ot qualify for such

gramme and Fund t and Regulations; velopment of the

currently provided

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b. Disablement Benefit c. Death Benefit d. Industrial Funeral Benefit e. Medical Care

4. Assistances

a. Sickness Assistance b. Old Age Non-Contributory Pension c. Invalidity Assistance d. Survivors Assistance

Over the period of its development, the NIB contributions have increased from a total number of 78,800 contributors in 1982 to 120,000 in 2002. Similarly the total number of pensions went from 8,614 in 1982 to 26,500 in 2002.

1.1.2 Formal mandate and structure of the NIB

The formal mandate of the NIB is laid down in the National Insurance Act and Regulations, 1972. The NIB management is made up of the following management units:

Figure 1: Organizational Structure of the NIB, Bahamas

1.1.3 Labour Market Information (LMI) usage in the NIB

The NIB is one of the main users of LMI in the Bahamas since this information is the input for its actuarial reports. These actuarial reports establish the current and projected financial status of the fund

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and advise on the level of the premiums needed to be able to comply with future benefits due, as well as the income ceiling of the insurable wage. An overview is presented in Table 1 below, of the basic labour market information needed as input for these actuarial reports and the current availability of these data:

Table 1:Labour Market Indicators Important to the NIB, Bahamas Labour market indicator Periodicity Importance Availability

Total population by age, sex and industry Annual Very high Acceptable Working age population by age, sex and industry Annual Very high Acceptable Labour force by age, sex, status in employment and industry

Annual Very high Acceptable

Earnings by age, sex, status in employment and industry


Occupational injuries/sickness by age and sex Annual High Acceptable 1.1.4 Current links with national and international institutions related to provision of LMI or

the mutual exchange of information

In order to access the input data needed for its actuarial reports, the NIB has developed ongoing relations with the Department of Statistics, focusing on information from the Population Census and the Labour Force Survey. Annual estimates of the population are produced by the Department of Statistics. NIB provides the Department of Statistics with general information on contributions collected and short-term benefits claimed. The Department of Statistics provides information on births and deaths. Occupational injuries and sickness information is complied from the databases of the NIB. 1.1.5 Maintaining the NIB database

The NIB has a computerized record keeping system that keeps records of both the employer and employee contributors as well as on beneficiaries. Details of the hardware available for storing, processing and analysing these records are provided in Annex 2a. These databases are available for tabulation to produce statistics. The currently used hardware and software at the NIB allow analysis of the information in the database quite easily through queries that can be downloaded to Microsoft Excel spreadsheet format. 1.1.6 The role and size of the NIB’s Actuarial & Research Services Department Currently the Actuarial & Research Services Department of the NIB consists of the following staff: Actuary, (1) Senior Statistician (1) and Statistical/Research Analyst (1) Details are as follows: Derek Osborne – Actuary Bachelors of Math (Actuarial Science) Fellow, Society of Actuaries

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Verdie Kriz - Senior Statistician B. Sc. (Statistics) Tami Francis - Statistical/Research Analyst B. Sc. (Chemistry) M. Sc. (Food Science & Nutrition) This unit produces the set of tables listed in Annex 3 (a)annually. Currently the main tasks of the Actuarial & Research Services Department of the NIB are as follows: 1. Actuarial

a. Conduct periodic actuarial reviews (every 4 or 5 years) b. Estimate effects of changes to NIB provisions c. Prepare annual contribution and benefit budget estimates d. Draft amendments to Acts & Regulations e. Provide advice on employee benefits f. Provide advice to the Bahamas Government and other corporations on pension plans

and other related issues 2. Research

a. Monitor contribution and benefit experience with a view to determine the need for changes to policy, procedures or provisions

b. Monitor changes in social security schemes around the world c. Prepare papers to support proposed amendments or changes to procedures, policy, etc.

3. Statistical

a. Gather and disseminate statistics on operational aspects of NIB b. Gather data for actuarial reviews and research papers c. Prepare statistical information and tables for Annual Reports and management

information d. Prepare data for external requests – international, regional and local.

1.2 The Current LMI Database: Conceptual Issues

1.2.1 The basic statistical units: Contributor person Within the approach of the NIB, a contributor person can be either an employee or a self-employed person. These concepts are defined as follows: 1. Employee contributor persons are persons working for an employer for wages up to $400 per week.

The employer actually transfers the total contributions due to the NIB. The employer contributes at a rate of 5.4% and the employee contributes at a rate of 3.4% of the insurable income. In addition to employees with indefinite contracts, the NIB Act and Regulations' definition of employee includes those with a temporary contract of short duration, casual workers who are without contract and hired on a daily basis, foreign, non-national workers and trainees/apprentices if they receive an income. Persons who are absent from work without pay at the time of the reporting, are excluded.

12

2. Self-employed contributor persons work in and operate their own business unit and their

remuneration is directly dependent upon the profits derived from the goods and services produced5. This definition includes those who employ non-family members in their enterprise, own account and one-person operations, unpaid family members working in the enterprise and members of production cooperatives.

The NIB database also includes records of persons who are not employees or self-employed as defined above. These special categories include:

a. Voluntarily insured persons (were once employed) b. Summer students

Reference date Remitting contribution information and funds to the NIB is the sole responsibility of the employer or the self-employed person. Employers and the self-employed submit updates of employee and self-employed contributor records monthly using the C10 contribution statement forms at Annex 4(a). These updates and funds refer to all employed during the reference month. Double counting There is a conceptual difference between double counting a person employed at one employer and counting a person as many times as he/she is reported by employers where this person is actually employed. The latter situation refers to so-called “multiple job holders” and is legitimate since it reflects the number of jobs one person holds. Double counting implies registration in the database of a person holding just one job, twice or more. This is an error. It is highly unlikely that in the database of the NIB of the Bahamas, double counting could go unnoticed for an extended period of time since a double counting implies that the contributions for this person would also need to be paid twice. 1.2.2. Reporting unit: Contributor enterprise By law all enterprises and self-employed in the Bahamas6 are required to register with the NIB upon the start of their activities. They are to report on the total number of employees and provide the information on employees at or below the income ceiling of the NIB, which is currently set at BAHS$400 per week7. Registration is made by the contributor enterprises themselves or enforced as a result of field inspection by NIB inspectors. Reference date (See paragraph 1.2.1)

5 This includes own consumption which is considered to be part of profits. 6 See also paragraph 1.2.1 of this report. 7 BAH$1=US$1

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1.2.3. Coverage of the system Given the laws and regulations regarding the NIB in the Bahamas, the information in its databases covers:

Both the private and the public sector,8 all industries and all legally established businesses, distinguished by their physical locations, regardless of their size in all of the Bahamas.

This legal coverage of the system includes the working proprietors and those in micro and small businesses as well. 1.2.4 Characteristics of employee or contributor person Registration of persons at the NIB National Insurance numbers are issued to individuals upon request after the completion of an application form.9. The information contained in the database on persons registered with the NIB is represented in Table 2 below:

Table 2: Personal Registration Data Sheet, NIB, Bahamas Item Registration files Contributor files A unique person number10 + + Names + - Date of Birth + - Sex + - Address + - Nationality + - Place of birth + - Marital status + - Number of dependants + - Education level + - Occupation + - Name of mother and father + - Spouse

Name + - Date of birth + -

Date of marriage + - Type of employment + - Income (if employed) + +

Note: Although personal information is not stored in the contribution files it can be easily obtained by linking files. Key: + = Yes ; - = No

8 The public sector is defined as including central government and local government (not state owned enterprises and other public sector entities). 9 At present National Insurance (NI) numbers are issued to school students as it is used as the ID# for national examinations. 10 This number is unique and can let a user know the sex of the person and the year and quarter of birth. This number becomes a permanent record.

14

The coverage of the NIB registration has increased over the years since banks and other institutions require the NI numbers on application forms; therefore many non-employed persons who requested an NI number are in the database. 1.2.5 Characteristics of employer / self-employed or contributor business Registration of establishments/enterprises usually takes place when the business first begins operation or when an NIB Inspector finds out about a new business and enforces registration. The database contains information on employers/self-employed represented in Table 3.

Table 3: Registration Data Sheet for Business Units, NIB, Bahamas

Item Registration Contributor

A unique Employer NIB number11 + + Name of enterprise/establishment/self-employed

+ -

Type of business + - The industrial code based on the type of business description12

+ -

Address of business + - Whether or not payroll system is computerised

+ -

Starting date of business + - Contact person & position held + -

Key: + = Yes: - = No At the time of registration, the information is keyed directly into the database. 1.2.6 List of definitions based on current practices Terminology Description Employee any person in an employment Contract worker a person entering into a business or legal agreement for a specified amount Casual worker a person working on a temporary basis Earnings wages received up to the ceiling for the referenced month Earnings ceiling maximum wage from which National Insurance contributions can be

deducted, i.e., $400 per week or $20,800 per year Enterprise branch one of many business locations of an enterprise Enterprise the entity legally responsible for an enterprise branch Establishment see enterprise branch Industry code four-digit code specifying a particular industry Benefit award received by beneficiary Beneficiary person a person entitled to a benefit, or as the case may be, an assistance Beneficiary report N/A 11 The Employer National Insurance number allotted to a business is a permanent record and it will not be used again even if the business ceases operation. 12 Over 90% of the employers on the Bahamas system have a valid industry code. Unfortunately, this code is not updated in the unlikely event that the nature of the business changes.

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Contributor enterprise a business that makes contributions Contributor person see Contributor Contributor Report N/A Occupation one’s profession Gross earnings amount before deductions Net Earnings amount after deductions Occupational code four-digit code specifying a particular occupation Self-employed a person gainfully occupied in an occupation in The Bahamas who is not

in respect of that occupation, an employed person Total time lapse the time elapsed between the due date of a contribution and when the

contribution is posted on the system Reporting time lapse the time elapsed between a contribution due date and when the NIB

receives it Processing time lapse the time elapsed between when contributions are received and when it is

posted on the system Working proprietor the owner of a business gainfully employed by that business Penalties interest charges on late payment of contributions Incentives N/A 1.3 The current LMI data base: data collection issues 1.3.1 Identification of reporting units including networking with other national agencies and

registers used Registration with the NIB and the Business License Department of the Government is compulsory by law when a new business starts. It is a requirement that all enterprises be registered. Registration can also be enforced when an NIS Inspector finds out about a new business in his/her area and enforces registration. The NIB provides no specific incentives for registration, timely and complete reporting. The main penalty for non-registration, false reporting, late reporting or no reporting is fines while for the self-employed a loss of benefits is an additional penalty that could be applied. However, the coverage of the NIB registration has increased over the years since banks and other institutions require the NIB number on application forms. Normal ongoing reporting by registered contributor enterprises takes place on a monthly basis. Every month employers submit a record of workers and wages paid while the self-employed submit monthly declarations. When a contributor enterprise/unit ceases to operate, goes out of business, merges, is taken over, dies, retires, etc., this is not always reflected in the NIS register. If it is reported, this is done with a time lag that varies. Compliance procedures The Inspectorate Department along with the Compliance Department monitors and reports on the level of compliance of employers/contributors in the NIB. The Compliance Department initiates installment

16

agreements with employers/contributors who are in arrears. Each agreement is monitored and maintained. Cases of all delinquent files are prepared for final prosecution by the Compliance Department before submission to the Legal Department of the NIB. 1.3.2. Updating information from the reporting unit 1.3.2.1 Frequency of reporting Updating the information in the NIB database poses several challenges. Information on the specifics of employed persons is regularly updated using the information contained in the forms submitted by the employers/self-employed for contributions paid. However, information on persons not employed as well as non-employment related information is not updated. This includes items such as marital status, the number of dependants etc. for which the NIB has no system of data collection after initial registration. Occupational and industrial codes of employed persons are usually not updated unless an employee changes from one employer to another. In these cases the new employer should indicate the nature of the new employment. 1.3.2.2 What updated information is available? The computerized files of individual businesses, contributors and beneficiaries of the NIB in the Bahamas are available for tabulation to produce aggregate statistics on the labour market. However, the legal provisions regarding the confidentiality of these individual records set constraints on access to these files by non-NIB persons. These constraints do not exist for NIB personnel and the NIB is prepared to produce tables, such as those included in Annex 5, on a monthly, quarterly, bi-annually or annual basis. Such aggregate statistics could be produced either based on the total number of records in the databases or on a sample of contributor establishments, persons, enterprises, or beneficiary persons. 1.3.2.3 What information is updated in the database? Utilizing the information contained in the C10 form, the NIB updates the following information in its databases after processing and checking the data for consistency.

Table 4: Information updated in the database, NIB, Bahamas

Registration file Contributors file Item Included Updated Frequency Included Updated Frequency

Person identifier number + - - - Name (person) + - - - Age (date of birth) + - - - Sex + - - - Marital Status + - - - Level of Education + - - - Address + - - - Commencement date of employment (for new employees)

-

-

+ + monthly Occupation + - - - Wage/Salary + - + + monthly Pay frequency - - + + monthly

17


(week/fortnight/month) Job description + - - - Business identifier number + - - - Name employer + - - - Nature of business (ISIC) + - - - Institutional sector + - - - Location/Address + - - - Number of Employees (Male/female)in enterprise

+

- + + monthly

Total payroll in enterprise - - - - Employer contribution to NIB - - + + monthly Employee contribution to NIB - - + + monthly Total contributions - - + + monthly

Note: The C10 can indicate that changes to personal information may be needed; however additional documentation may be necessary Key: + = Yes ; - = No

1.3.2.4. Time Lag To be able to interpret statistics compiled for a specific reference date from the database of the NIB, it is necessary to distinguish between the following two types of time lags in the process of updating records: 1. The reporting time lag: The time elapsed between the date on which a contribution13 is due and

when it is actually received by the NIB. The contributions due on the 31 of January 2003 indicate those who are employed during January. However, statistics referring to 31 of January cannot be compiled on that same date since the NIB does not receive (all) contributions/reports on this date. The reporting time lag can be defined as the time it takes to receive all or almost all contributions/reports from the employers/self-employed. This lag will determine how long the analyst will have to wait before credible employment statistics that refer to a specific date, can be produced. In the Bahamas the reporting time lag is two months since about 80%14 of the contributions/reports are received within two months after a due date.

2. The processing time lag: The time elapsed between the date on which the contribution/report is

received and when it is posted to the database15. This lag is mainly due to processing and other organizational issues. In the Bahamas this lag is usually one month after the contribution was received.

Based on these two types of time lags the total time lag in the system in the Bahamas is estimated to be 3 months.

13 Or report on the contributors persons (employees) 14 The reporting time lag would be six months if a 90 to 95 % norm were used. 15 This lag is expected to decrease in the coming months.

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1.3.2.5 Conclusion: Reference date and production of data Based on the current practices of the NIB in the Bahamas it is recommended that tabulation of data should be done quarterly16. This implies that data will be produced for the following four reference or calendar dates:

Reference date Earliest date for producing the

data17 31 December 31 March 31 March 30 June 30 June 30 September 30 September 31 December

1.3.3 Institutional issues Compliance levels are relatively high among employed persons. Thus, 95% of employed persons make contribution payments (not every month). However, only 17% of self-employed persons are regular contributors. These numbers suggests that about 30,000 of the estimated 150,000 employed persons do not contribute to NIB. Most of the non-compliance comes from self-employed persons and workers of very small businesses. The contribution ceiling of $400 is relatively low with 30% of workers with wages above the ceiling. Wage information for service sector workers (hotel/retail) is understated since contributions are only paid on base pay excluding gratuities, tips or commission. In some cases, these tips/commissions exceed base pay. In many instances, the personal information of registrants is not updated. At the time of registration for a business, an industrial code is selected to satisfy the description of the type of business. Over 90% of the employers on the Bahamas system have a valid industry code. Unfortunately, this code is never updated. In contrast, the occupational code may be updated but this occurs only when an employee changes jobs and the employer indicates the nature of the new employment. However, changes due to promotion or transfer within the same employing business are not reported so the quality of occupational data may be assessed as being unreliable.

1.4 Recommendations 1.4.1 Objectives The NIB of the Bahamas sees itself as a potential source for labour statistics. The major conclusion from the evaluation of the NIB database is that it is currently possible to produce on a relatively frequent basis a selected number of indicators on:

16 The total time lag in the system is two months if a norm of 80% of the contributor enterprises completing reporting is adopted. For contributor reporting units for which there has been no reporting for the reference date, the last updated information should be used in tabulation. The total number of contributor enterprises for whom no update was received for the reference date should be included in each table as a note. 17 Considering the time lag.

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Total paid employment and wages up to $400 per week per person, in the formal or registered sector by age, sex, institutional sector and industry.

It should be noted that this approach excludes the self-employed sector, as well as those in the informal sector whether they are in paid employment or self-employed. It also excludes collecting and producing information on the unemployed population or other beneficiaries. More information could be produced from the NIB database to meet the mid and long term objectives (detailed below), provided that some changes are adopted in the system of data collection and processing. As such, the following section outlines specific objectives recommended. 1.4.2 Specific objectives and time line The following detailed objectives and time frame are suggested:

1. Short term objectives that can be attained immediately without any changes in the system.

a. Perform an initial, mechanical update of the industry code of all contributor enterprises using the Industry Classification Codes of the Department of Statistics of the Bahamas (June 2003).

b. Resolve the issue regarding the updates of changes in occupation by developing a terms of reference for and outsourcing the job to provide the NIS with efficient solutions to the problem (Date questionable).

c. Design and produce tables to be compiled from the current NIB database on (See Annex 5): i. Table 1 series: Number of paid employee contributor persons and average

monthly insurable earnings by sex, institutional sector and industry. ii. Table 2 series: Number of private sector paid employee contributor persons

and average monthly insurable earnings by sex and employment size of enterprise.

iii. Table 3 series: Number of paid employee contributor persons and average monthly insurable earnings by age and sex.

iv. Table 5 series: Distribution of paid employee contributor persons in monthly insurable earning groups by institutional sector and sex.

d. Institutionalize a working relationship with the Department of Statistics that will include: (June 2003)

i. Agreement on collaboration in the coding of the occupations using the International Standard Classification on Occupations (ISCO) and of industry using the International Standard Industrial Classification of all Economic Activities (ISIC)

ii. Consensus on the format of tables to be produced iii. Joint plan and implementation of an awareness campaign and training seminar

for users on the tables produced and particularly their relation with other labour market information available.

2. Mid term objectives that can be attained with some minor adaptations to the system.

a. Implement a jointly planned national enterprise/establishment register that is compiled and used by both the NIB and the Department of Statistics. (Date questionable)

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b. The introduction of a unique, national business number for each establishment or enterprise in the Bahamas. (June 2006)

c. Plan and implement the collection of additional data needed by the NIB as well as other LMI users including: (June 2005) i. Start collection of information on wages above the ceiling of the NIB and/or

the total monthly wage bill ii. Process records of enterprise contributors by physical locations whenever the

reporting traditions and procedures allow this iii. Reduce the response burden on employers.

3. Long term objectives that can be attained only after adopting major changes. a. Developing insurance services specifically targeted and tailored to the needs of the

self-employed, particularly the micro, small enterprises and the informal sector. Such programmes would increase the de facto coverage of the NIB, its database and consequently its employment statistics on these sectors. (Date questionable)

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2 _________________________________________________________________________________________

Dominica Social Securit

Steven Mayers,18

2.1. Background

2.1.1 History of the Dominica Social Security (DSS)

The Dominica Social Security was established in 1975 by the Social Security Acoperational in February 1976. The objective of the DSS is to: • be acknowledged as a National Insurance Scheme, founded on the fundament

pooling of resources and sharing of risk to offer a measure of social protecpersons;

• to serve with integrity and be clearly recognised for the high level of efficiencyand courtesy offered to its customers;

• to secure and hold in trust contributions collected and make timely and accclaims/benefits in accordance with legislative requirements/prescription and tviability and sustainability of the scheme; and

• to adhere to the basic principles of equity and social justice in the allocation/adScheme’s fund, thus contributing to long term economic and social developmenresponsibility to promote investment in social programmes which will benefit all

Within the framework of these objectives the Dominica Social Security currefollowing benefits under its different programmes19 . 1. Short term benefits

a. Maternity benefit; b. Sickness.

2. Long term benefits: a. Old Age; b. Invalidity; c. Funeral; d. Survivors.

18 Director, Dominica Social Security 19 Self-employed persons qualify only for the Long Term Benefits

y

t. It became fully

al principle of the tion to its insured

, quality of service

urate payment of hereby ensure the

ministration of the t and accepting the Dominicans.

ntly provides the

22

3. Employment injury benefit:

a. Injury; b. Disablement; c. Death; d. Medical Expenses.

Over the period of its development contributors to the Dominica Social Security have increased from a total number of 1,401 in 1976 to 18,000 in 2002. Similarly the total number of benefits paid went from 2,053 in 1976 to 9,255 in 2002.

2.1.2 Formal mandate and structure of the Dominica Social Security The formal mandate of the DSS is laid down in the Social Security Act of 1975. The DSS management is made up of the following units: • Administration • Registration, Contributions & Compliance • Benefits • Accounts

2.1.3 LMI interest of the Dominica Social Security The DSS is one of the main users of LMI in Dominica since this information is the input for its actuarial reports. These actuarial reports establish credit worthiness of the fund and the advice on the level of the premiums needed to be able to comply with future benefits due, as well as the income ceiling of the DSS. An overview is presented in Table 5 below of the basic labour market information needed as input for these actuarial reports and the current availability of these data.

Table 5:Labour market indicators important to the Dominica Social Security

Labour market indicator Periodicity Importance Availability Total population by age, sex, industry and occupation


Working age population by age, sex, industry and occupation

Annual Very High Acceptable

Labour force by age, sex, status in employment, industry, and occupation

Every 5 years

Very High Acceptable

Earnings by age, sex, status in employment, industry and occupation


Occupational injuries/sickness by age and sex Annual Very High Acceptable 2.1.4 Current links with national and international institutions related to provision of LMI or mutual exchange of information In order to access the input data needed for its actuarial reports the DSS has developed ongoing relations with the Central Statistical Office (CSO), focusing on information from the Population Census and the Labour Force Survey. Annual estimates of the population are produced by the CSO. Occupational injuries and sickness information is complied from the databases of the DSS.

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2.1.5 Maintaining the DSS database

The Dominica Social Security maintains computerized data files of all employer, employee and self-employed contributors as well as of beneficiaries. This information is kept in 3 subsystems – Registration, Contribution, and Benefits. Details of the hardware available for storing, processing and analysing these records are provided in Annex 2(b). Although the primary goal of the DSS is not the collection and production of labour market information, the database generated as a result of the administrative process is used to produce labour statistics.

2.1.6 The role and size of the Dominica Social Security’s Statistical Department Currently the Statistical Department of the DSS consists of a staff of 2 persons20: the manager who has a MSc. in Actuarial Science and a BSc. in Mathematics & Computer Science, and the Systems Administrator who has an Associate Degree in Computer Science. This unit produces the set of tables listed in Annex 3(b) annually. The main tasks of the Statistical Department of the Dominica Social Security are as follows: Actuarial • Ensuring that relevant statistics on DSS operations are correctly documented for actuarial

purposes and publication, and routinely compiled and available in the prescribed format in order to ensure on-time production of accurate reports in accordance with established schedule or special requests.

• Analysing and reviewing the actuarial implications due to changes in legislation. • Ensuring that Actuarial Reports/Reviews are communicated to stakeholders in a format which

facilitates a better understanding of DSS issues. Statistical • Performing data analysis and projection assumptions based on ILO models. Research • Monitoring demographic trends and conducting necessary research in order to advise

management.

2.1.7 Current joint activities with other agencies There are currently no joint activities with other agencies. However, the DSS is working closely with the Central Statistics Office on a couple of projects.

2.2. The current LMI data base: conceptual issues 2.2.1 The basic statistical units: contributor person In the context of the DSS a contributor person can be either an employee or a self-employed person. These concepts include:

20 This includes 1 person who is “already trained to produce tables of quantitative information from a database?”

24

1. Employee contributor person is a person of 16 years and over working for an employer for a

wage or salary. Contributions are payable on amounts up to a maximum income amount. This maximum amount, the income ceiling, is currently set at EC$5,000 per month21 or EC$1,155 per week. In addition to employees with indefinite contracts, the Social Security Regulations include in the definition of employee, those with a temporary contract of short duration, casual workers without contract who are hired on a daily basis, foreign/non-national workers and trainees/apprentices if they receive an income. Persons who are absent from work without pay at the time of the reporting, are excluded.

2. Self-employed contributor person: a person of 16 years and over who works in and operates

his/her own business unit and whose remuneration is directly dependent upon the profits derived from the goods and services produced22. Self-employed persons earning less than EC$600 per year are exempt from paying contributions. The definition includes employers (those who employ non-family members in their enterprise), own account workers (one-person operations, with or without family members) and members of production co-operatives.

Special Categories: The DSS database also includes records of persons who are not employees or self-employed as defined above. These special categories include: 1. Persons not employed in Dominica but contributing or eligible for benefits. 2. Beneficiaries who did not contribute but are eligible for benefits. Reference date Information on contributor persons is captured at the time of registration of the enterprise and thereafter monthly. The contributor person files are updated monthly by the employers and/or self-employed utilizing the standard reporting form (see Annex 4(b) for Contributors Remittance Form C8). Double counting There is a conceptual difference between double counting a person employed at one employer, and counting a person as many times as he/she is reported by employers where this person is actually employed. The latter situation refers to so-called “multiple job holders” and is legitimate since it reflects the number of jobs one person holds. Within one year therefore, the DSS may have several employment records for a particular employee, but keeps only one employee record for this person. Double counting implies registration in the database of a person holding just one job, twice or more. This is an error. It is highly unlikely that in the database of the DSS of Dominica, double counting could go unnoticed for an extended period of time, since a double counting implies that the contributions for this person would also need to be paid twice. 2.2.2 Reporting unit: contributor enterprise

21 EC$2.68=US$1 22 This includes own consumption which is considered to be part of profits

25

Enterprises and self-employed are the reporting units used on contributors in the information system of the DSS. By law, all enterprises and self-employed in Dominica23 are required to register their unit and the employees with the DSS upon the start of their activities. The contributor enterprise/employer is required to register a contributor person within three days of the start of employment and the employed person receiving pay. Enterprises must provide the DSS with a detailed list, including amendments, of all employed persons every month. Most persons whose income is above the income ceiling 24 only declare their earnings up to the ceiling. Reference date The reference date for the registration information is the month of registration. Reporting and updating enterprise contributor records is similar to that of the contributor person records (see also paragraph 2.2.1). The C8 reporting forms are used and these provide data for the month in which contributions were due. (See Annex 4b). 2.2.3 Coverage of the system In accordance with the laws and regulations regarding the DSS, the information in its database covers:

Both the private and the public sector25, all industries and all legally established businesses, regardless of their size in all of Dominica.

This legal coverage of the system includes the working proprietors and those in micro and small businesses as well. However, the assessment of the DSS is that it covers approximately 60% of total employment, 95% of total paid employees and 10% of all self-employed. This discrepancy between legal coverage and actual coverage is due to various reasons, including 1. Poor compliance among the self-employed particularly those in the informal sector. It is assumed

that this is because the self-employed can only participate in the long-term benefits and because enforcement in this sector is difficult

2. The high level of delinquency. Some persons in the informal sector, especially professionals, do not see the need for registration.

2.2.4 Characteristics of employee or contributor person26 Registration of persons at the DSS: The information contained in the DSS database is obtained from two sources:

• information provided at the time of registration; and • the monthly submission of information on contributions made.

This reporting is done by the contributor enterprise using standard forms. Records on contributor persons registered with the DSS are kept in two subsystems, the registration subsystem and the contributions subsystem. Since the last re-structuring of the information system of the DSS these sub-systems contain the following information on each contributor person:

23 See also paragraph 2.1.2 of this report. 24 See also paragraph 2.1.1 of this report. 25 The public sector is defined as including central government and local government, state owned enterprises and other public sector entities. 26 The Director of the Dominica Social Security has the legal authority to amend the various filing requirements from employers.

26

Table 6: Personal Registration Data Sheet, Dominica Social Security Variable Registration file Contributions file Person identifier number27 + + Name + - Date of Birth + - Sex + - Marital Status + - Level of Education + - Address + - Commencement date of employment - + Occupation28 + - Wage/Salary29 - + Pay frequency (week/fortnight/month) - + NIS contribution - + Job description - +

+ = Yes - = No

2.2.5 Characteristics of employer/self-employed or contributor business Records on contributor enterprises registered with the DSS are also kept in two subsystems, the registration subsystem and the contributions subsystem. The systems are updated through the registration forms and the monthly contribution forms (See Annex 4b for Contribution Remittance Form C8). Since the last re-structuring of the information system of the DSS these sub-systems contain the following information on each contributor enterprise:

Table 7: Registration Data Sheet for Business Units, Dominica Social Security

Variable Registration file

Contribution file

Business identifier number + + Name + - Nature of business (ISIC) + -

27 This number is unique and can let a user know the sex of the person and the year and quarter of birth. This number is a permanent record. 28 DSS introduced a new information system about 3 years ago and changed the way occupation is captured in the system. In the old system, occupation was captured at the time contribution payments were entered. In the new system, occupation is a field in the records of the registration file and only captured at registration. At the same time, the occupation field was removed from the records of the contribution files. 29 The wages submitted by the employer on the Contribution form are only the Insurable Wages. There is a monthly maximum insurable wage of $5,000 for monthly paid employers and a weekly maximum of $1,155 for weekly paid employers. There is therefore no obligation on the employer to give the actual wage.

27

Variable Registration file

Contribution file

Institutional Sector - public (gov't, semi-gov't) and private sector + - Location/address + - Number of Employees (male/female) - + Employee Names + - Employee Wages - + Job Description - + Employer contribution - + Employee contribution - + Total payroll - + Total contributions - +

+ = Yes - = No 2.2.6 List of definitions based on current practices

Terminology Description

Employee One who is working for an employer for a wage or salary Contract worker One who is assigned a specific job to be done within a specified time Casual worker One who is employed on and off Earnings The wage or salary paid to an employee for work done over a period of

time. Earnings ceiling An amount above/below which contribution payments remain the

same or are not paid Enterprise branch Enterprise Company/employer Establishment Company/employer Industry code The code which differentiates between types of economic activity

performed by establishments/enterprises Benefit Pension or grant paid to an insured during sickness, retirement or after

death Beneficiary person One who is in receipt of a benefit Beneficiary report A listing of beneficiaries, the benefits that they are receiving and the

amount of benefit Contributor An employee or self- employed person who is insured with the scheme

and makes regular payments to the scheme Contributor enterprise

An employer / establishment who pays contributions on behalf of employees

Contributor person

Same as contributor

Contributor report Report showing names of employees, employer and employee contribution amount, wages and period of employment.

Occupation The type of work performed by an employee Gross earnings Total earnings before Taxes and Social Security are deducted Net earnings Gross earnings less Taxes and Social Security

28

Terminology Description

Occupational code The code which identifies the type of work performed by an employee Self-employed One who works for himself Reporting time lag The time taken for reporting changes/additional information Processing time lag

The time taken for updating records

Working proprietor

One who is both the employer and the employee

Penalties Action taken against employers/establishments in the case of non-compliance of Social Security Regulations

2.3 The current LMI data base: data collection issues 2. 3.1 Identification of reporting units including networking with other national agencies and registers used Registration and enforcing compliance In accordance with the Social Security Act, all enterprises must register with the DSS all persons they employ of age 16 and over within 3 days of the start of employment. There is no distinction between trainees, casual or temporary staff. Once payment is received, it is the responsibility of the employer to ensure that the person is registered. The self-employed must also register at the commencement of their operations. Registration of establishments/enterprises, usually takes place when the business first begins operation or when a DSS Inspector finds out about a new business and enforces registration. Employers submit a monthly record of workers and wages paid. If any employee does not have a registration number, it may be an indication that the employee is not registered. In most cases, the establishment/enterprise or employee is contacted. Self-employed submit quarterly declarations. When a contributor enterprise/unit ceases to operate, that is, goes out of business, merges/is taken over, dies, retires, etc., this is usually reflected in the DSS register within a month. .

Compliance procedures Compliance officers carry out regular surveys to identify non-compliant employers. If attempts to enforce compliance fail, court action is taken as a last resort. There is a Legal Officer on staff, who is responsible for dealing with those situations. Fines are the main penalties applied for non-compliance, and these are mainly enforced for non-reporting of monthly contribution payments. Penalties are seldom applied for non-registration. The DSS has no system of incentives such as bonuses, reduced contributions etc., for compliance with registration obligation or timely and correct reporting. 2. 3.2 Updating information from the reporting unit 2.3.2.1 Frequency of reporting

29

Information on the specifics of employed persons is regularly updated using the information contained in the C8 forms submitted monthly by the employers/self-employed for contributions paid. However, updating the information in the DSS database poses several challenges, including the following: 1. A high level of non-compliance - enterprises not reporting regularly and on time. 2. The total time lapse between the occurrence of a change in the status of a contributor person and

updating the record concerned in the database of the DSS. 3. Outdated information on the occupation of the contributor person. Since this information is

recorded in the Registration sub-system instead of the contributor subsystem, it is not updated at any time. There is also the problem of employers not providing ‘Job Description’ on the C8 form.

4. Outdated information on the Industry. Non-reporting of changes in industry is common. There is no system in place to ensure that the DSS is informed of such changes when this occurs..

5. Poorly developed classification of the nature of industrial injuries/illnesses in the information system. Inefficient procedures for recording data in the system to enable its usage for the insurance system as well as for other labour statistics.

6. Insufficient coverage of the self-employed and in particular of the informal sector. Only a very small percentage of the informal sector (about 10%) is registered with the Dominica Social Security. Although it is a legal requirement for self-employed persons to be registered, it is not being enforced.

2. 3.2.2 What updated Information is available? The computerized files of individual businesses, contributors and beneficiaries of the DSS are available for tabulation for the production of aggregate statistics on the labour market. However, the legal provisions regarding the confidentiality of these individual records set constraints on access to these files by non-DSS persons. These constraints do not exist for DSS personnel and the DSS is prepared to produce tables, such as those included in Annex 5, monthly, quarterly, bi-annually or yearly. Such aggregate statistics could be produced either based on the total number of records in the databases or on a sample of contributor establishments/enterprises, of contributor persons or beneficiary persons. 2. 3.2.3 What Information is updated in the database? Utilising the information contained in the C8 form, the DSS updates the following information in its database after processing and checking the data for consistency.

Table 8: Information updated in the database, Dominica Social Security

Registration file Contributions file Variable Included Updated Frequency Included Updated Frequency

Person identifier number + - - + -- -

Name (person) + + When

necessary - - - Date of Birth + - - - - - Sex + - - - - -

Marital Status + + On

marriage - - - Level of Education + - - - - -

Address + + When

necessary - - -

30

Commencement date of employment - - - + +

When necessary

Occupation + - - - - - Wage/Salary - - - + + Monthly Pay frequency (week/fortnight/mth) - - - + + Monthly Job description - - + - - Business identifier number + - - + - - Name employer + - - - - - Nature of business (ISIC) + - - - - - Institutional Sector -(public (gov't, semi-gov't) and private sector + - - - - -

Location/address + + When

necessary - - - Number of Employees (male/female) in enterprise - - - + + Monthly Total payroll) in enterprise - - - + + Monthly Employer contribution to DSS - - - + + Monthly Employee contribution to DSS - - - + + Monthly Total contributions - - - + + Monthly

+ = Yes ; - = No Frequency monthly, quarterly, biannually, annually 2.3.2.4 Time lag In order to be able to interpret statistics compiled for a specific reference date from the DSS database, it is necessary to distinguish between the following types of delays that occur in the process of updating records: 1. The reporting time lag: The time elapsed between the date on which a contribution30 is due and

when it is actually received by the DSS. Contributions for a particular month are due on the 14 of the following month. Therefore the contributions due for persons, who were employed for any period during the month of January 2002, are due on February 14, 2002. However, statistics referring to the month of January cannot be compiled on February 14 since the DSS does not receive (all) contributions/reports by that date. The reporting time lag can be defined as the time it takes to receive all or almost all contributions/reports from the employers/self-employed. This delay will determine how long the analyst will have to wait before credible employment statistics that refer to a specific period, can be produced. In Dominica, the reporting time lag is 4 weeks, since about 90% of the contributions/reports are received within 4 weeks after a due date.

30 Or report on the contributor persons (employees).

31

2. The processing time lag: The time elapsed between the date on which the contribution/report is received and when it is posted to the database. This delay is mainly due to processing and other organizational issues. In Dominica, except in the case of Government employees, this lag is minimally 2 weeks after the contribution was received.

Based on these two types of delays the total time lag in the system in Dominica is estimated to be 6 weeks. 2.3.2.5 Conclusion: reference date and production of data Based on the current practices of the DSS, it is recommended that tabulation of data should be done quarterly31. This implies that data will be produced for the following four reference or calendar dates:

Reference date Earliest date for producing the data32 31 December 31 March 31 March 30 June 30 June etc. 30 September 30 September 31 December

2.4 Recommendations 2.4.1 Objectives The Dominica Social Security is a potential source for labour statistics. The major conclusion from the evaluation of the DSS LMI database is that it is currently possible to produce on a relatively frequent basis a selected number of indicators on:


It should be noted that this approach excludes the self-employed sector, as well as those in the informal sector whether they are in paid employment or self-employed. It also excludes the collection and production of information on the unemployed population or other beneficiaries. More information could be produced from this data source provided that some changes are adopted in the system of data collection and processing, to meet mid and long term objectives. More specifically, the following objectives are recommended: 2. 4.2 Specific objectives and time line The following detailed objectives and a time frame are suggested: 1. Short term objectives that can be attained immediately without any changes in the system.

Time frame: March 2003 to July 2003.

31 As discussed in paragraph 2, the total time lag in the system is 6 weeks if a norm of 90% of the contributor enterprises completing reporting is adopted. For contributor reporting units for which there has been no reporting for the reference date, the last updated information should be used in tabulation. The total number of contributor enterprises for whom no update was received for the reference date should be included in each table as a note. 32 Considering the total time lag.

32

a. Perform an initial, mechanical update of the industry code of all contributor enterprises using the Industry Classification Codes of the Central Statistical Office of Dominica.

b. Resolve the issue of the missing information on occupation by developing a terms of reference for and outsourcing the job to: i. Mechanically re-code or import the information on occupation33 from the DSS’

Registration subsystem into the Contribution subsystem34; ii. Re-introduce the link between the Contribution sub-system and the information

available from the monthly payments to provide for regular updates of the occupation. (June 2003).

c. Occupational Health and Safety: Develop a terms of reference to resolve conceptual, data processing and tabulation issues regarding the information on benefits for illnesses and injuries which occur in the workplace. This to ensure that the information captured can be used effectively for the purposes of the DSS as well as for Labour Statistics. (June 2003)

d. LMI on the Statutory Boards. Determine with the users of labour market information if the tables to be produced should provide information on Statutory Boards separately. (May 2003)

e. Design and produce tables to be compiled from the current DSS database on (See Annex 5): i. Table 5.1 series: Number of paid employee contributor persons and average

monthly wage earnings by sex, institutional sector and industry. ii. Table 5.2 series: Number of private sector paid employee contributor persons

and average monthly wage earnings by sex and employment size of enterprise. iii. Table 5.3 series: Number of paid employee contributor persons and average

monthly wages earnings35 by age and sex. iv. Table 5.4 series: Number of private sector paid employee contributor persons

and average monthly wage earnings by occupation and sex. The occupation of contributors is not up to date and consequently it is recommended that the production of these tables be postponed until the issues relating to the occupation field in the records are resolved.

v. Table 5.5 series: Distribution of paid employee contributor persons in monthly earnings36 groups by institutional sector and sex (April 2003).

f. Institutionalize a working relationship with the Central Statistical Office that will

include:

i. Agreement on collaboration on coding of the occupations (ISCO) and the industry (ISIC)


for users on the tables produced and particularly their relationship with other

33 This is relevant for records that were transferred from the old system to the new system and consequently no longer have the ‘Occupation’ field filled. 34 It will be very costly and time consuming for DSS to manually re-enter this information. 35 All tables on “earnings” should include an explanatory note specifying the definition of earnings, particularly the DSS earnings ceilings, which limit the coverage of statistics on earnings derived from its databases. 36 See earlier note on earnings

33

labour market information available. The campaign/seminar should include issues such as the regular reporting on changes in the occupation of employees, and the need for employers to declare the full wage rather than the insurable wage (July 2003).

2. Mid term objectives that can be attained with some minor adaptations to the system: a. Implement an assessment of measures needed to ensure that coverage of the

formal sector is maximized. This should include the costs involved in an effective redeployment of staff, particularly compliance inspectors (September 2003).

b. Implement a jointly developed national enterprise/establishment register that is compiled and used by both the DSS and the CSO. The register should include the classification of the industry of each enterprise/establishment. In the context of finalising this project activity it is recommended that a terms of reference be developed for the completion of this enterprise register that will provide the DSS with an up-to-date Economic Activity Code based on the ISIC (October 2003).

c. The introduction of a unique, national business number for each establishment/enterprise in the country (December 2003).

d. Plan and implement the collection of additional data needed by the DSS as well as other LMI users including: i. Declaration of total earnings including amounts above the earnings ceiling (for

contributions) of $60,000.00 annually (see also Annex 5). ii. Separate filings for geographically distinct operations of the company. This

will allow processing of records of enterprise contributors by physical locations (already being done).

iii. Reduce the response burden on employers (December 2003). 3. Long term objectives that can be attained only after ongoing changes:

a. Develop insurance services specifically targeted and tailored to the needs of the self-employed, particularly the micro, small enterprises and the informal sector. Such programmes would increase the de facto coverage of the DSS, its database and consequently its employment statistics on these sectors (June 2004).

34

3 ___________________________________________________________________________

______

Grenada National Insurance Scheme Dorset Cromwell37

3.1. Background 3.1.1. History of the Grenada National Insurance Scheme (NIS) The National Insurance Law of 1983 established the Grenada National Insurance Sca system of contributions and payments of benefits. At the time of its inception, theFund took over the assets and management of the Provident Fund, which was estabfor Agricultural Workers. In 1988, the coverage of the National Insurance Scheminclude self-employed, particularly own account workers38, as voluntary contributothe National Insurance Scheme is to provide the employed population39 with soincludes the following benefits: 1. Short Term Benefits:

a. Sickness benefit; b. Maternity benefit. c. Funeral grant

2. Long Term Benefits:

a. Old age benefit; b. Survivors benefit; c. Invalid benefit.

3. Employment Injury Benefits

a. Injury Benefit b. Death Benefit c. Disablement Benefit d. Injury Funeral Benefit e. Constant Attendance f. Medical Expense

37 Manager of Statistics, Research and Planning, Grenada National Insurance Scheme 38 Own account workers are employed in and running their own businesses without employing non-famoperations on a regular basis. 39 Self-employed persons and voluntary contributors qualify only for the Long Term Benefits

heme (NIS) through National Insurance

lished earlier mainly e was extended to

rs. The objective of cial protection that

ily workers in their

35

Over the period of its development contributions to the Grenada NIS have increased from a total of 802 contributors in 1983 to 34,808 in 2002. Similarly the total value of benefits paid went from $7,759 in 1983 to $16,604,704.20 in 2002.

3.1.2. Formal mandate and structure of the NIS The formal mandate of the NIS is laid down in the National Insurance Law of 1983. The NIS management is made up of the following management units: • The Board of Directors referred to as the National Insurance Board. The Board manages the NIS

and is responsible for administering the Fund in accordance with the Law. • The Director of the Fund40.

The structure of the organization is displayed below in Figure 2:

Figure 2: Organizational Structure of the Grenada National Insurance Scheme

3.1.3. LMI interest of the NIS The NIS is one of the main users of LMI in Grenada since this information is the input for its actuarial reports. These actuarial reports establish the long-term credit worthiness of the fund and provide advice on the level of the premiums needed to be able to comply with future benefits due, as well as on the income ceiling of the NIS. An overview is presented in Table 9 below of the basic labour market information needed as input for these actuarial reports and the current availability of these data. 40 Appointed by the Board with the approval of the Minister responsible for the NIS.

36

Table 9: Labour market indicators important to the NIS, Grenada




Monthly Very High Good





Occupational injuries/sickness by age and sex


3.1.4 Current links with national and international institutions related to provision of LMI or mutual exchange of information In order to access the input data needed for its actuarial reports, the NIS has developed ongoing relations with the Central Statistical Office (CSO) focusing on information from the Population Census and the Labour Force Survey. Annual estimates of the population are produced by CSO. The collaboration with the CSO is mutual as the NIS provides the CSO with information on employer and employee registration with the NIS. Information on births and deaths is provided by the Ministry of Health, and occupational injuries and sickness information is complied from the databases of the National Insurance Scheme (NIS). 3.1.5 Maintaining the Grenada National Insurance Scheme database The Grenada National Insurance Scheme maintains computerised data files of all employers, employee and self-employed and the system keeps track of employer and employee contributors as well as of beneficiaries. This information is kept in 3 subsystems: Registration, Contribution and Benefits subsystems41. Details of the hardware available for storing, processing and analysing these records is provided in Annex 2(c) Although the primary goal of the NIS is not the collection and production of Labour Market Information this information is captured as a result of its administrative process. Its databases are available for tabulation to produce these statistics. The information in the database and the currently used hardware and software42 allow extensive manipulation and analysis of the information stored quite easily through queries that can be exported to Microsoft Excel spreadsheet format. 3.1.6. The role and size of the NIS’s Statistical Department The following two staff members of the NIS’s Statistical Department are trained and involved in statistical analysis and interpretation: • Dorset Cromwell - Statistics, Research & Planning Manager, B.Sc (Maths & Computer Science),

41 These subsystems include specific data files such as the employee master file, the employer master file, the employee contribution file, employee contribution summary file and the employer contribution file. 42 The NIS uses the AS400 database system developed and maintained by GSI International, a company based in Canada. The system is quite flexible and allows the tables requested to be created easily.

37

MAS (Actuarial Science) • Carmel Gibbs – Customer Service Clerk, B.Sc (Management) In process This unit produces the set of tables listed in Annex 3(c). Some of the tables are produced monthly (Table series 4 & 5) while others are produced on request. Currently the main tasks of the Statistical department of the NIS in Grenada are as follows: 1. Actuarial

a. Produce monthly statistical digest b. Gather data for actuarial reviews c. Prepare data and tables for Annual Reports & management

2. Research

a. Respond to all external requests for information from: • Central Statistic Office • Eastern Caribbean Central Bank • ISSA • Regional Social Security Schemes

b. Produce Director’s Report 3. Statistical

a. Maintaining the NIS Database • Ensuring records are entered in a timely manner • Ensuring the accuracy of the records entered

3.2 The current LMI data base: conceptual issues 3.2.1 The basic statistical units: contributor person In the context of the legal framework of the NIS, contributors are both enterprises and persons. Both types of contributors are defined below. A contributor person can be either an employee or a self-employed person. These concepts include: 1. Employee contributor person; a person between 16 and 60 years of age, working for an employer

for a wage or salary that does not exceed EC$3,000 per month,43 $1385 per fortnight, and $693 per week for employees paid according to the respective time periods. In addition to employees with indefinite contracts, the NIS regulations also include those with a temporary contract of short duration, casual workers without contract who are hired on a daily basis, foreign, non-national workers and trainees/apprentices if they receive an income. Persons who are absent from work without pay at the time of the reporting, are excluded.

2. Self-employed (voluntary) contributor person: a person of 16 and up to 60 years of age who is

gainfully employed but not as a paid employee. This definition includes all who work in and

43 EC$2.68=US$1

38

operate their own business unit and whose remuneration is directly dependent upon the profits derived from the goods and services produced44 such as: a) Employers (those who employ non-family members in their enterprise). b) Own account workers (one-person operations, with or without family members). c) Members of production co-operatives.

Special categories The NIS database also includes records of voluntary contributors, who are not employed but contribute to the NIS. Other special records relate to 3. Persons not employed in Grenada but contributing and eligible for benefits. 4. Beneficiaries who did not contribute to the NIS, (but contributed to the Provident Fund) and are

eligible for benefits Reference date Information on contributor persons is captured at the time of registration of the enterprise and thereafter monthly. The contributor person files are updated using the standard remittance reporting form C3, (see Annex 4c.), which are submitted each month by the employers/self-employed. These updates refer to all those employed during the month for which the contributions were due. Double counting There is a conceptual difference between double counting a person employed at one employer and counting a person as many times as he/she is reported by employers where this person is actually employed. The latter situation refers to so-called “multiple job holders” and is legitimate since it reflects the number of jobs one person holds. Within one year therefore, the NIS may have several employment records for a particular employee, but keeps only one employee record for this person. Double counting implies registration in the database of a person holding just one job, twice or more. This is an error. It is highly unlikely that in the database of the NIS in Grenada double counting could go unnoticed for an extended period of time since a double counting implies that the contributions for this person would also need to be paid twice. 3.2.2 Reporting unit: contributor enterprise Enterprises are the reporting units on contributors in the information system of the NIS. By law all enterprises employing one (1) or more workers in Grenada are required to register their unit and the employees within 7 days of first employment. It is the obligation of the contributor enterprise/employer to register a contributor person within 4 days after employment was taken up. Enterprises are required to provide NIS with a detailed list, including amendments, of all employed persons every month. In these reports information must be provided for all employees at or below the income ceiling of EC$3000 per month. Those employed as own account workers, that is, working in and running their own businesses have a similar reporting obligation if they joined the NIS on a voluntary basis. Reference date The reference date for the registration information is the month of registration or the end of the month for which the contribution is due. The contributor person files are updated using the C3 forms, which are submitted each month by the employers/self-employed. These updates of contributor person records refer to those employed at the end of the month for which the contributions were due. 44 This includes own consumption which is considered to be part of profits

39

The contribution files are updated most often monthly using the monthly reports provided by the reporting units. 3.2.3 Coverage of the system In accordance with the laws and regulations with respect to the NIS in Grenada, the information in its databases covers:

Both the private and the public sector,45 all industries and all legally established businesses, distinguished by their physical locations, regardless of their size in all of Grenada.

The coverage of the system includes persons in paid employment as well as the working proprietors and those in micro and small businesses. However, the assessment of the NIS is that it actually covers approximately 75% of total employment, 80% of total paid employment46. Coverage of the self-employed has not been assessed, but considering the voluntary nature of their participation in the NIS, coverage is expected to be very low. The discrepancy between legal coverage and actual coverage is due to various reasons, including: 1. Poor compliance levels in the informal sector coupled with difficulty in enforcement. This

results in low coverage of paid employees in this sector which consists of micro and small businesses.

2. Information submitted by the Government on its non-establishment employees does not conform to NIS standards. . The weaknesses in the information supplied make it difficult to include this category properly into the databases and this affects the employment statistics produced by the NIS.

3.2.4 Characteristics of employee or contributor person47 Registration of contributor persons at the NIS The information contained in the NIS databases come from two sources, namely, the report provided at the time of registration and from the form which is submitted monthly with contributions. This reporting is done by the contributor enterprise using standard C3 forms. Records on contributor persons registered with the employer are kept in the Employee Master File and the Employee Contribution File. The record on each contributor person in the information system of the NIS includes the following items listed in Table 10: 45 The public sector is defined as including central government and local government, state owned enterprises and other public sector entities. 46 The assessment of the NIS indicates that the majority of those in paid employment in Grenada receive wages/salaries that are at or below the ceiling. If wages are computed at monthly basis, it is assumed that only about 8% to 9% of the labour force is contributing on earnings at the ceiling. During the 6th Actuarial Review inquiries at the Inland Revenue Department supported this assessment. It was also revealed that only a very small percentage of the labour force is receiving wages above the $3000 ceiling on which National Insurance Contributions are payable. 47 The Director of the Grenada NIS has the legal authority to amend the various filing requirements from employers.

40

Table 10 : Items recorded for each contributor person registered, NIS, Grenada Available in Item

Employee Master file

Employee Contribution File*

Name contributor person + - Person identifier number + + Age (date of birth) + - Sex + - Occupation - - Status in employment - + Earnings (or similar) ($) - + NIS contribution ($) - + Hours of work - - Identifier of employing business - + Location (Address) of employer - - Industry of employer - - Institutional sector of employer - - Employment size of employer - - Other (list) - -

+ = Yes - = No * Some of these characteristics are captured at registration (of the business/employee). 3.2.5 Characteristics of employer/self-employed or contributor business The NIS updates information on contributor enterprises from the two sources, the report submitted at the time of registration of the enterprise and the monthly submission of information on contributions made. Records on contributor enterprises registered with the NIS are kept in two databases, the employer master file and the employer contribution file. These files contain information as indicated in Table 11 below on each contributor enterprise:

Table 11: Items recorded for each enterprise contributor registered, NIS, Grenada Available in Item

Employer Master File Employer Contribution File*

Business identifier number + + Name of enterprise + - Location (address) + - Institutional sector + - Industry + - Number employed - + Total payroll ($) - + Total NIS contributions ($) - + Start date of business + - Termination date of business + -

+ = Yes - = No * Some of these characteristics are captured at registration (of the business/employee)..

41

3.3 List of definitions based on current practices Terminology Description Employee A person who performs service under a contract of service or

apprenticeship Contract worker A person who performs a specific job within a specific time Casual worker A person employed on a day-to-day basis Earnings The wage, salary and other remuneration received from

employment Earnings ceiling The amount above which National Insurance Contributions are not

deducted; $3000 for monthly paid employees, $1385 for fortnightly paid & $693 for weekly paid

Establishment Company/employer. Geographically separated parts of the business are assigned sub-files; The registration number of the original legal entity plus end numbers

Industry code Four digit code from International Standard Industrial Classification of all Economic Activities used to distinguish one industry from the other

Benefit Includes an award payable to the beneficiary in the form of a pension, grant or benefit

Beneficiary person A person entitled to or receiving a benefit under the National Insurance Laws of Grenada

Beneficiary report A report detailing a list of beneficiaries by sex, the type and amount of benefits that they are receiving

Contributor A person who has paid for at least one contribution week during the year in question

Contributor enterprise:

An employer who makes contribution payments to the NIS

Contributor person See contributor Contributor report N/A Occupation A person’s profession Gross earnings Total earnings before deductions Net earnings Earnings after deductions Occupational code Four digit code specifying employee’s occupation Self-employed A person who is gainfully employed in Grenada but not in the

employment of any other person Total time lag The time between the due date of the contribution and when it is

posted on the system Reporting time lag The time between the due date of the contribution and when it is

submitted by the employer Processing time lag The time between when the contribution is received by the NIS and

when it is posted on the system Working proprietor The owner of a business entity who is also employed by that

business Penalties Payments made to the NIS for non-compliance with National

Insurance Laws and Regulations

42

3.3 The current LMI data base: data collection issues 3.3.1 Identification of reporting units including networking with other national agencies and

registers used Registration and enforcing compliance Registration of establishments/enterprises, usually takes place when the business first begins operation or when an NIS Inspector discovers a new business and enforces registration. Collaboration with the Government Registry, Inland Revenue assists with the identification of unregistered business. In accordance with the National Insurance Law of 1983 Act, all enterprises employing one or more employees between the ages of 16 to 60 years must register the employees with the NIS, , within 4 days of the start of their employment.. There is no distinction between trainees, casual or temporary staff. It is the responsibility of the employer to ensure that the person is registered. The self-employed can register on a voluntary basis at the commencement of their operations or later. Normal ongoing registering of new employees by registered contributor enterprises takes place on a monthly basis. Employers submit a monthly record of workers and wages paid while the self-employed submit a monthly declaration of earnings. When a contributor enterprise/unit ceases to operate, that is, goes out of business, merges/is taken over, dies, retires, etc., this is or will be reflected in the NIS register by the next reporting cycle. The changes in the databases are effected within a time lag of approximately 4 weeks. Compliance procedures The Compliance and Inspectorate Department are mainly involved in enforcing compliance. Fines are the main penalties applied for non-compliance. The NIS has no system of incentives such as bonuses, reduced contributions etc., for compliance with registration obligation or timely and correct reporting. 3.3.2 Updating information from the reporting unit 3.3.2.1 Frequency of reporting Information on the specifics of employed persons is regularly updated using the C3 forms submitted monthly by the employers/self-employed for contributions paid. However, updating the information in the NIS database poses several challenges, including the following:

1. The total time lag between the occurrence of a change in the status of a contributor person and updating of the record concerned in the NIS databases.

2. Outdated information on the occupation of the contributor person. The source of this information is the Registration sub-system and it is not updated at any time. The C3 form does not request information on the ‘Job Description’ of the contributor.

3. Outdated information on the Industry: Failure to report changes in industry is common. . There is no system in place to ensure that the NIS is informed of such changes.

4. Poorly developed classification system on the nature of industrial injuries/illnesses within the information system. Inefficient procedures for the collection, coding, and recording of data resulting in unreliable statistics in the insurance system and in other labour statistics

5. Insufficient coverage of the self-employed and in particular of the informal sector which is partly due to the voluntary nature of their participation. Only a very small percentage of the informal sector -registered with the NIS.

43

3.3.2.2 What updated information is available The computerized files of individual businesses, contributors and beneficiaries of the NIS are available for tabulation for the production of aggregate statistics on the labour market. However, the legal provisions regarding the confidentiality of these individual records set constraints on access to these files by non-NIS persons. These constraints do not exist for NIS personnel and the NIS is prepared to produce tables, such as those included in Annex 5 monthly, quarterly, bi-annually or yearly. Such aggregate statistics could be produced either based on the total number of records in the databases or on a sample of contributor establishments/ enterprises, of contributor persons or beneficiary persons. 3.3.2.3. What Information is updated in the database Utilizing the information contained in the C3 form the NIS updates the following information in its databases after processing and checking the data for consistency:

Table 12: Information updated in the database, NIS, Grenada

Registration files Contributors files Variable Included Updated Frequency Included Updated Frequency

Person identifier number + - - + - - Name (person) + - - - - - Age (date of birth) + - - - - - Sex + - - - - - Marital Status + - - - - - Level of Education - - - - - - Address + + Ad Hoc - - - Commencement date of employment + +

New Employ. - - -

Occupation + - - - - - Wage/Salary - - - + + wrk/frt/mthly Pay frequency (week/fortnight/month) - - - + + wrk/frt/mthly Job description - - - - - - Business identifier number + - - + - - Name employer + + On Req. - - - Nature of business (ISIC) + - Ad Hoc - - - Institutional Sector (public vs. private sector) + + Ad Hoc - - - Location/address + + Ad Hoc - - - Number of Employees (male/female in enterprise) - - - + + Wrk/frt/mthly

44

Variable Registration files Contributors files Included Updated Frequency Included Updated Frequency Employer contribution to NIS - - - + + wrk/frt/mthly Employee contribution to NIS - - - + + wrk/frt/mthly Total contributions - - - + + wrk/frt/mthly

+ = Yes ; - = No, Frequency monthly = mthly, fortnight = frt, weekly = wrk 3.3.2.4 Time lag In order to be able to interpret statistics compiled for a specific reference date from the NIS databases it is necessary to distinguish between the following two types of delays in the process of updating records: 1. The reporting time lag: The time elapsed between the date on which a contribution48 is due and

when it is actually received by the NIS. The contributions due on the 31 of January 2002 indicate those employed during the month. However, statistics referring to 31 of January cannot be compiled on that same date since the NIS does not receive (all) contributions/reports on this date. The reporting time lag can be defined as the time it takes to receive all or almost all contributions/reports from the employers/self-employed.. In Grenada the reporting time lapse is approximately 5 weeks since about 90% of the contributions/reports are received within 4 weeks after a due date.

2. The processing time lag: The time elapsed between the date on which the contribution/report is received and when it is posted to the database. This lag is mainly due to processing and other organisational issues. In Grenada this delay is minimally 3 weeks after the contribution was received.

The total time lag in the system in the Grenada is estimated to be 8 weeks. 3.3.2.5 Conclusion: reference date and production of data Based on the current practices of the NIS it is recommended that data tabulation should be done quarterly. This implies that data will be produced for the following four reference or calendar dates:

Reference date Earliest date for producing the data49

31 December 31 March 31 March 30 June 30 June etc.. 30 September 30 September 31 December

3.4 Recommendations 3.4.1 Objectives The Grenada National Insurance Scheme is a potential source for labour statistics. The major conclusion from the evaluation of the NIS LMI database is that it is currently possible to produce on a relatively frequent basis a selected number of indicators on: 48 Or report on the contributors persons (employees) 49 Considering the total time lag .

45


It should be noted that this approach excludes the self-employed sector, as well as those in the informal sector whether they are in paid employment or self-employed. It also excludes collecting and producing information on the unemployed population or other beneficiaries. More information could be produced from this data source provided that some changes are adopted in the system of data collection and processing to meet mid and long term objectives. The following section outlines mid and long-term objectives recommended. 3.4.2. Specific Objectives and Time Line 1. Short term objectives:

a. Perform an initial, mechanical update of the industry code of all contributor enterprises using the Industry Classification Codes of the Central Statistical Office of Grenada.

b. Resolve the issue of the missing information on occupation by developing a terms of reference for and outsourcing the job to: i. Re-introduce the link between the Contribution sub-system and the information

available from the monthly payments to provide for regular updates of the occupation.

c. LMI on the Statutory Boards. Determine with the users of labour market information if the tables to be produced should provide information on Statutory Boards separately.

d. Design and produce tables to be compiled from the current NIS database to include (See Annex 5): i. Table 1 series: Number of paid employee contributor persons and average

monthly wage earnings by sex, institutional sector and industry. ii. Table 2 series: Number of private sector paid employee contributor persons and

average monthly wage earnings by sex and employment size of enterprise. iii. Table 3 series: Number of paid employee contributor persons and average

monthly wages earnings50 by age and sex. iv. Table 5 series: Distribution of paid employee contributor persons in monthly

wage earnings51 groups by institutional sector and sex. e. Occupational Health and Safety: Develop a terms of reference to resolve conceptual,

data processing and tabulation issues regarding the information on benefits for illnesses and injuries which occur in the workplace. This to ensure that the information captured can be used effectively for the purposes of the NIS as well as Labour Statistics.

f. Institutionalize a working relationship with the Central Statistical Office that will include: i. Agreement on collaboration on coding of the occupations (ISCO) and the

industry (ISIC) ii. Consensus on the format of tables to be produced iii. Joint plan and implementation of an awareness campaign and training seminar

for users on the tables produced and particularly their relation with other labour market information available. The campaign/seminar should include issues such as the regular reporting on changes in the occupation of employees.

50 All tables on “earnings” should include an explanatory note specifying the definition of earnings, particularly the NIS earnings ceilings, which limit the coverage of statistics on earnings derived from its databases. 51 See earlier note on earnings

46

2. Mid term objectives that can be attained with some minor adaptations to the system. a. Implement an assessment of measures needed to ensure that coverage of the

formal sector is maximized. This should include the costs involved in an effective redeployment of staff, particularly compliance inspectors.

b. Implement a jointly developed national enterprise/establishment register that is compiled and used by both the NIS and the CSO. The register should include the classification of the industry of each enterprise/establishment. In the context of finalising this project activity it is recommended that a terms of reference be developed for the completion of this enterprise register that will provide the NIS with an up-to-date Economic Activity Code based on the ISIC.

c. The introduction of a unique, national business number for each establishment/enterprise in the country.

d. Plan and implement the collection of additional data needed by the NIS as well as other LMI users including: i. Separate filings for geographically distinct operations of the company. This

will allow processing of records of enterprise contributors by physical locations.

ii. Start collection of information on wages above the ceiling of the NIS and/or the total monthly wage bill

iii. Reduce the response burden on employers. 3. Long term objectives that can be attained only after significant changes:

a. Developing insurance services specifically targeted and tailored to the needs of the self-employed, particularly the micro, small enterprises and the informal sector. Such programmes would increase the de facto coverage of the NIS, its database and consequently its employment statistics on these sectors.

47

4 _________________________________________________________________________________ Central Bureau of Statistics, Netherlands Antilles Zaida Lake52

4.1 Background 4.1.1. History of the Old Age Pension Scheme (OAPS) In the Netherlands Antilles there is no centralised, national social insurance in the English speaking Caribbean that can be used as a comprehensive infmarket parameters. The Social Security Bank (SVB) is charged with the respthe Old Age Pension Scheme (OAPS), but the registration and administrationand contributor persons is outsourced to the Revenue Office of the Tax dOffice is therefore the primary source of information on contributors to the sy A meeting of stake holders with an interest in participating in NIS activities oLabour Market Information Systems (CLMIS) project concluded that the RevDepartment) is the most comprehensive data source for the generation of laboIn particular, the database of the Old Age Pensions Scheme (OAPS), which hmaintained to identify contributor enterprises and persons and to assess premthe main source of labour market information. Participants at this meeting feof a methodology and related software to match the information in the databain the databases of the SVB and other institutions would greatly enhance the u Participants from the Insurance Bank and the Tax Department supported the a sort of central registration unit (physical and/or logical), and indicated theirwith the CLMIS National Specialists of the Central Bureau of Statistics (CBSusefulnesss of the data. The Old Age Pension Scheme (OAPS) was established in 1960 by Publicatiebbecame operational in 1960. This insurance scheme is run by the SVB but theassessment of the premiums is done by the Revenue Office. The objective of all citizens with an old age pension regardless of their employment history. 4.1.2 Formal mandate and structure of the OAPS The formal mandate of the OAPS is laid down in the Publicatieblad of 1960. is made up of the following units: - Inspectie der Belastingen (the Revenue Office): responsible for asses

52 Labour Market Senior Statistician, Central Bureau of Statistics, Netherlands Antilles

institution similar to those ormation source on labour onsibility of implementing of contributor enterprises epartment. The Revenue stem.

f the Caribbean enue Office (Tax ur market information. as been iums, was identified as lt that the development se with that available sefulness of the data.

idea of setting up willingness to co-operate ) to enhance the

lad 1960 nr. 83, and identification and the OAPS is to provide

The OPAS management

sment of the premium

48

- Landsontvanger (Tax collector’s office) / S.V.B. (Social Security Bank): responsible for the collection of premiums

- S.V.B: responsible for payment of the old age pension

4.1.3 LMI interest of the OAPS The OAPS is one of the main users of LMI in the Netherlands Antilles since this information is the input for its actuarial reports. These actuarial reports establish the credit worthiness of the fund and the advice on the level of the premiums needed, to be able to comply with future benefits due as well as the income ceiling of the OAPS. An overview is presented below of the basic labour market information needed as input for these actuarial reports and the current availability of these data. 4.1.4 Current links with national and international institutions related to provision of LMI or mutual exchange of information In order to access the input data needed for its actuarial reports the OAPS has developed ongoing relations with the Central Bureau of Statistics, focusing on information from the Population Census and the Labour Force Survey, administrative data from the Chamber of Commerce, and the Population Registrar from the SVB. Annual estimates of the population are produced by CBS. The collaboration with the Central Bureau of Statistics is mutual as the OAPS provides the CBS with information on the total employed population registered at the Office. Information on births and deaths is provided by the Population Registrar. 4.1.5 Maintaining the OAPS database The databases of the Old Age Pension Scheme, maintained by the Revenue Office (Tax Department), are the most comprehensive data source for labour market information. These databases contain records of the contributor enterprises and persons of the OAPS. The hardware and software in use at the Revenue Office facilitate analysis of the information in the database quite easily through queries that can be downloaded into Microsoft Excel. 4.1.6 The role and size of the OAPS Statistical Department Currently the Revenue Office has no special statistical unit to process and/or analyse the databases of the OAPS and consequently no tables are produced utilising the stored information. 4.1.7 Current joint activities with other agencies The Revenue Office maintains a close working relationship with the Chamber of Commerce, the Civil Registration Office, Social Affairs and the Dienst Werkgelegenheid en Inkomen, S.V.B. and the Dienst Arbeidszorg.

4.2 The current LMI data base: conceptual issues 4.2.1 The basic statistical units: contributors In keeping with the legal framework for the OAPS contributors are both enterprises and persons. Both types of contributors are defined below. In the context of the OAPS, a contributor person can be either an employee or a self-employed person. This concept includes: 1. Employee contributor person is a person of 15-60 years working for an employer for a wage or

salary. There are no exclusions based on region, type of economic activity, occupation or size

49

of the enterprise. In addition the OAPS regulations include in the definition of an employee, those with a temporary contract of short duration, casual workers without contract who are hired on a daily basis, foreign, non-national and/or illegal workers and trainees/apprentices if they receive an income

2. Self-employed contributor person: a person of between15 and 60 years who works in and operates his/her own business unit and whose remuneration is directly dependent upon the profits derived from the goods and services produced.53 Similar to paid employees, there are no exclusions based on region, type of economic activity, occupation or size of the enterprise. The definition also includes employers (those who employ non-family members in their enterprise), own account workers (one-person operations, with or without family members) and members of production co-operatives.

Special categories The OAPS database also includes records of persons who were previously employed but who are currently not employed. Reference date Each contributor enterprise submits a monthly report containing the total number of total employed persons during that month, the total amount of earnings paid and the total amount of premiums paid. The self-employed submit these reports annually54. The information provided on the different components of earnings of the employee and the information on the different characteristics of the contributor person such as age, sex etc., refers to the situation existing at the end of the calendar year. Double counting. There is a conceptual difference between double counting a person employed at one employer and counting a person as many times as he/she is reported by employers where this person is actually employed. The latter situation refers to so-called “multiple job holders” and is legitimate since it reflects the number of jobs one person holds. Within one year therefore, the Revenue Office may have several employment records for a particular employee, but keeps only one employee record for this person. Double counting implies registration in the database of a person holding just one job, twice or more. This is an error. It is highly unlikely that in the Netherlands Antilles OAPS double counting could go unnoticed for an extended period of time since this implies that the contributions for this person would also need to be paid twice. However, it is possible for someone who is actually employed to be omitted from the system. Such cases of non-registration include potential contributors, such as illegal workers who are not registered at the Revenue Office unless they register themselves in the system. In this context, it should be noted that it was not possible to provide an estimate of the actual coverage of the OAPS database. 4.2.2 Reporting unit: contributor enterprise Enterprises and self-employed are the reporting units listed on contributors in the OPAS information system. By law, all enterprises and self-employed in all of the Netherlands Antilles are required to

53 This includes own consumption which is considered to be part of profits 54 For the self-employed the information refers to the situation existing at the end of the year while for paid employees this refers to the situation by the end of the month for which fees are due.

50

register their unit and the employees with the Revenue Office upon the start of their activities. Registered contributor enterprise/employer is obliged to provide the Revenue Office with a detailed list, including amendments, of all employed persons every month. Reference date The reference date at first registration is taken as the end of the month of registration. With respect to ongoing reporting, the reference dates for the self-employed refer to the situation existing at the end of the year and for paid employees, the situation at the end of the month for which the fees were due. The information provided on the different components of the earnings and of the different characteristics of the contributor persons such as age, sex, etc., refers to the situation existing at the end of the calendar year. 4.2.3 Coverage of the system In accordance with the laws and regulations of the OAPS in the Netherlands Antilles, the information in the databases of the Revenue Office covers the private and the public sector,55 all industries and all legally established businesses, distinguished by their physical locations regardless of their size in all of the Netherlands Antilles. However, the assessment is that it covers approximately 60% of total employment. This discrepancy between legal coverage and actual coverage is due to various reasons, including: 1. The self-employed, particularly those in the informal sector are less attracted to this long-term

benefits scheme, resulting in low compliance among this group. In addition, enforcement in this sector is very difficult.

2. Legality or illegality of immigrant workers is not important to the RO. This office registers all workers as contributors to the OAPS. However illegal or self-employed workers may be unwilling to contribute to the OAPS.

4.2.4 Characteristics of employee or contributor person The information contained in the OAPS databases is obtained from three sources, the report provided at the time of initial registration, and the monthly and the annual submission of information to the Revenue Office which is used to compute premiums due. This reporting is done by the contributor enterprise using standard forms. Table 13 below provides an overview of the information on each contributor person, contained in the system of the OAPS:

Table 13: Items recorded for each contributor enterprises registered, OAPS, Netherlands Antilles

Item Available

Name + Person identifier number + Identifier of employing business + Location of employer +

55 The public sector is defined as including central government and local government, state owned enterprises and other public sector entities.

51

Item Available

Industry of employer + Institutional sector of employer + Employment size of employer + Age (date of birth) + Sex + Occupation -/ Marital status + Status in employment + Earnings (or similar) ($) + NIS contribution ($) + Other (list) -

+ = Yes - = No 4.2.5 Characteristics of employer/self-employed or contributor business Similarly to the contributor person information, the Revenue Office updates information on contributor enterprises from the three sources mentioned above: the report submitted at the time of registration of the enterprise, the annual and the monthly submission of information on contributions made. Records on contributor enterprises registered with the Revenue Office for the purpose of the OAPS are kept in two databases, the Wage Tax file and the Profit Tax (WB) file. The information system of the OAPS contains the following information on each contributor enterprise:

Table 14: Registration Data Sheet for Business Units, OAPS, Netherlands Antilles Item Available Name + Business identifier number + Location (province) + Institutional sector + Industry + Number employed + Total payroll ($) + Total NIS contributions ($) + Other -

+ = Yes - = No 4.2.6. List of definitions based on current practices Terminology Description Employee all persons on the payroll of an employer Contract worker all sub-contractors who perform work for an employer. Normally they

do not appear on the LB form. Casual worker not separately identified in the database of the Revenue Office.

Included in the category of ‘employees’. Earnings direct wages and additional wage components as specified by the

existing Old Age Pension regulations Earnings ceiling the maximum of total earnings of an individual contributor person

above which he Old Age premium remains constant.

52

Enterprise an employer having one or more persons working, but could also be working alone.

Industry code ISIC Contributor person who pays Old Age Pension premium Contributor enterprise enterprise that pays the OAP premium for the employee Contributor person person for whom premium is paid and/or self-employed person Contributor report form filled in by the person or the enterprise about earnings and total

sum of premium paid Occupation available but not coded by the RO Gross earnings earnings before deduction of premiums and other costs Net earnings earnings after deductions Self-employed persons who are their own employer Total time lag time elapsed between reference date over which report is submitted and

next reference date (usually a month) Reporting time lag time between reference date and deadline for reporting (max. 2 weeks

after reference date) Processing time lag in an ideal situation max. 2 weeks after date of submitted report Penalties fees paid for non-compliance within stipulated period 4.3 The current LMI data base: data collection issues 4.3.1 Identification of reporting units including networking with other national agencies and registers used In accordance with the “Loon Belasting Verordening” or Wage Tax Act, all employers in enterprises must register all employees of age 15 to 60 with the Revenue Office within 2 weeks after the date that employee starts work. This is regardless of the status of the employee, which could be trainee, casual worker, temporary worker or permanent worker. The self-employed must register their enterprise at the RO by the first quarter of the year following the tax year. Besides the compulsory registration, there is also: • Voluntary registration: Employees and self-employed persons who claim they have right to a tax

refund, usually register themselves and their employees voluntarily in the LB (wage tax database) at the RO.

• Enforced registration after identification of non-registered contributor enterprises or persons by the Revenue Office. The Revenue office searches for non-registered enterprises, employees and self employed utilizing available data from the Chamber of Commerce and news papers.

When a contributor enterprise/unit ceases to operate, that is, goes out of business, merges, etc., the OAPS updates this information within two weeks after the enterprise goes out of business. This relatively short period is due to legally regulated requiremnent, which the Revenue Office enforces. Fines are levied for non-registration and for late or false reporting. Neither the Revenue Office nor the Social Security Bank has a system of incentives such as bonuses, reduced contributions etc., for complying with registration or timely and correct reporting.

53

4.3.2 Updating information from the reporting unit 4. 3.2.1 Frequency of reporting Information on the specifics of employed persons is regularly updated using the information contained in the Wage Tax Office and Income Tax forms that are submitted with contributions paid. However, at the end of the year, 31st of December, the RO re-assesses the amount paid by the enterprises based on the information that enterprises provide at the end of the year using the Wage Tax Form. The self-employed are assessed at the end of the year on the basis of the Income Tax form that is used to set the due premiums for the next calendar year. Updating the information in the OAPS database poses several challenges, including limited staffing of the operations of the Revenue Office and the need for training. These are issues that should be addressed urgently. 4.3.2.2 What updated information is available? The computerised files of individual businesses, contributors and beneficiaries of the OAPS are available for tabulation for the production of e aggregate statistics on the labour market. However, the legal provisions regarding the confidentiality of these individual records set constraints on access to these files by non-Revenue Office persons. These constraints do not exist for Revenue Office personnel and the Revenue Office is prepared to produce tables, such as those included in Annex 5, monthly, quarterly, bi-annually or yearly. These aggregate statistics could be produced either based on the total number of records in the databases or on a sample of contributor establishments/ enterprises, of contributor persons or beneficiary persons. 4.3.2.3 What information is updated in the database? Utilizing the information contained in the LB form the OAPS updates the following information in its databases after processing and checking the data for consistency.

Table 15: Information Updated in the database, OAPS, Netherlands Antilles Item Available Frequency of

update (w/m/y/o)

Name person + Person contributor identifier number + Identifier of employing business + Location of enterprise + Type of industry + Institutional sector of employer + Employment size of enterprise + monthly Age (date of birth) + Yearly Item Available Frequency of

update (w/m/y/o)

Sex + Occupation (1) +/ Yearly Marital status + Yearly Status in employment (2) +/- Yearly

54

Earnings (or similar) ($) + yearly NIS contribution ($) + Yearly Other (list) - Name Business + Yearly Business contributor identifier number + Location (province) + Institutional sector + Industry + Number employed persons - Monthly Total payroll ($) + Monthly Total NIS contributions ($) + Monthly Other -

+ = Yes; - = No Notes: (1) Limited, only on the pay sheet of the employee who contributes voluntarily if he/she feels he

has the right to a tax refund. (2) Only self-employed or Paid employee

4.3.2.4 Time lag In order to be able to interpret statistics compiled for a specific reference date from the OPAS database it is necessary to distinguish between the following types of delays in the process of updating records: 1. The reporting time lag: The time elapsed between the date on which an assessment report56 is due

and when it is actually received by the Revenue Office. The contributions due on the 31 of January 2003 indicate those who are employed on that date. However, statistics referring to 31 of January cannot be compiled on that same date since the OAPS does not receive (all) contributions/reports on this date. The reporting time lag can be defined as the time it takes to receive all or almost all contributions/reports from the employers/self-employed. This lag will determine how long the analyst will have to wait before credible employment statistics that refer to a specific date, can be produced. In the Netherlands Antilles the reporting time lag for the monthly reporting57 is 2 weeks because 80% of the contributions/reports are received within two weeks after a due date. Statistics will be produced on a yearly basis.

2. The processing time lag: The time elapsed between the date on which the contribution/report is received and when it is posted to the database. This lag is mainly due to processing and other organisational issues. In the Netherlands Antilles this lag is usually 2 weeks after the contribution was received.

Based on these delays the total time lag in the system in the Netherlands Antilles is estimated to be 2 weeks.

56 Or report on the active contributors persons (employees/self-employed) in the business 57 The time lag for the yearly reporting of the enterprises is unknown (to the author). However, for the monthly reporting and updates the time lag is 2 weeks.

55

4.3.2.5 Conclusion: reference date and production of data Based on the current practices at the Revenue Office in the Netherlands Antilles it is recommended that tabulation of data should be done quarterly.58 This implies that data on employment/earning will be produced for the following four reference or calendar dates:

Reference date Earliest data for producing the data59 31 December 31 January 31 March 30 April 30 June etc. 31 July 30 September 31 October

4.3.2.6 Sources for non -registration Persons or enterprises not registered as tax payers at the RO. 4.3.2.7 Sources for over-registration Basically this is not applicable because every contributing person and enterprise has a unique number in the system. 4.3.2.8. Institutional issues A serious limitation on the use of the OAPS database for labour market information is that reporting on occupational information is not compulsory. Consequently reporting on this item by the enterprises is not consistent and the RO does not code the item. It is therefore of little or no statistical relevance in the OAPS database. 4.4 Recommendations 4.4.1 Objectives The conclusion from the evaluation of the OAPS database maintained by the Revenue Office is that it is currently possible to produce labour market information from this source on a relatively frequent basis. Specifically a number of selected indicators can be produced for:

Total paid employment and wages, in the formal or registered sector by sex, and by institutional sector, and industry.

It should be noted that this approach excludes the self-employed sector, as well as those in the informal sector whether they are in paid employment or self-employed. It also excludes information on the unemployed population since no data collection takes place for this category. More information could be produced from this data source to meet mid and long term objectives, provided that the intended “matching” with other available computerised databases is completed. In conclusion the following objectives are recommended: 4.4.2 Specific objectives and time line 1. Short term objectives that can be attained immediately without any changes in the system.

58 As discussed in paragraph 6.3.2.4. the total time lapse in the system is two months if a norm of 80% of the contributor enterprises completing reporting is adopted. For contributor reporting units for which there has been no reporting for the reference date, the last updated information should be used in tabulation. The total number of contributor enterprises for whom no update was received for the reference date should be included in each table as a note. 59 Considering the time lag.

56

a. Perform an initial, mechanical update of the industry code of all contributor enterprises using the Industry Classification Codes of the Central Statistical Bureau of the Netherlands Antilles.

b. Design and produce tables to be compiled from the current OAPS database on (see Annex 5);

i. Table 1 series: Number of paid employee contributor persons and average monthly wage earnings by sex, institutional sector and industry.

ii. Table 2 series: Number of private sector paid employee contributor persons and average monthly wage earnings by sex and employment size of enterprise.

iii. Table 3 series: Number of paid employee contributor persons and average monthly wages earnings by age and sex.

c. Institutionalize a working relationship with Central Bureau of Statistics that will include:

i. Agreement on collaboration on coding of the occupations (ISCO) and the industry (ISIC)


for users on the tables produced and particularly their relationship with other labour market information available.

2. Mid term objectives that can be attained with some minor adaptations to the system: a. Resolve the issue of the missing occupational data in the OAPS information base.

Two options should be evaluated. Matching the OAPS databases with other databases or introduction of occupational information as part of the compulsory monthly reporting to the Revenue Office. It is recommended that a terms of reference be developed for the job to resolve this issue.

b. Plan and implement the following actions that could increase efficiency and reliability of the information in the OAPS databases: i. Processing of records of enterprise contributors by physical location whenever

the reporting traditions and procedures allow this. ii. Reduce the response burden on employers. 3. Long term objectives that can be attained only after ongoing changes. a. Produce the following tables once the missing occupational data is included : i. Table 4 series: Number of private sector paid employee contributor persons

and average monthy wage earnings by occupation and sex (see Annex 5). ii. Table 5 series: Distribution of paid employee contributor persons in monthly

wage earning groups by institutional sector and sex (see Annex 5). b. Develop additional insurance services specifically targeted and tailored to the

needs of the self-employed, particularly the micro, small enterprises and the informal sector. Such programmes would increase the de facto coverage of the OAPS, its database and consequently its employment statistics on these sectors.

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5 __________________________________________________________________________________

National Insurance Corporation of Saint LuciAlbert Cenac,60

5.1 Background 5.1.1 History of the Saint Lucia National Insurance Corporation (NIC) The Saint Lucia National Insurance Corporation (NIC) was established in April 1insurance Scheme Act of 1979. It became fully operational in June 1979. The objecprovide social protection to the employed population. Within this framework, provides the following benefits:

1. Short Term Benefits:

a. Employment Injury b. Maternity allowance; c. Maternity grant d. Sickness allowance e. Medical expenses f. Funeral grant

2. Long Term Benefits:

a. Retirement and Retirement grant b. Invalidity pension and invalidity grant c. Disability pension and disability grant d. Survivors pension and survivors grant e. Death Benefit

Over the period of its development contributions to the Saint Lucia National Inshave increased from a total number of 15,000 contributors in 1980 to 39,000 in 200value of benefits paid went from $4.39M in 1980 to $26.68M in 2002.

5.1.2.Formal mandate and structure of the NIC

The formal mandate of the NIC is laid down in the National Insurance Scheme Act primary function of the NIC is to ensure that payroll contribution deductions are colare paid on time. Effectively, this enables the NIC more than any other organization

60 Statistics, Training, Research Manager, National Insurance Corporation of St. Lucia, assisted by Pau61 Self-employed persons qualify only for the Long Term Benefits

a

979 by the National tive of the NIC is to the NIC61 currently

urance Corporation 2. Similarly the total

of 1979. The lected and benefits /establishment in St.

l Kallicharan, Research

58

Lucia to generate a unique database with varied levels of utilization. As a quasi-governmental organization, the NIC is made up of the following management units: • Board of Directors responsible for policy formulation • Executive Director responsible for managing the institution. • Senior Managers responsible for specific management task • Supervisors responsible for departmental functions

5.1.3 LMI interest of the NIC The NIC is one of the main users of LMI in St. Lucia since this information is the input for its actuarial reports. These actuarial reports establish credit worthiness of the fund and the advice on the level of the premiums needed to be able to comply with future benefits due, as well as the income ceiling of the NIC. An overview is presented in Table 16 below of the basic labour market information needed as input for these actuarial reports and the current availability of these data:

Table 16: Labour market indicators important to the NIC, St. Lucia


Annual Very high Partially







Occupational injuries/sickness by age and sex Annual Very high Acceptable Establishment by location and level of employment Annual Very high Acceptable Employment by location, gender and age Annual Very high Acceptable Earnings by location gender and age Annual Very high Acceptable

5.1.4 Current links with national and international institutions related to provision of LMI or mutual exchange of information To satisfy national and international agencies’ need for information the NIC provides aggregate information on the insured population in various ways, usually on request. The following institutions/agencies are established users of this service: • The Eastern Caribbean Central Bank (ECCB): They generally request information on levels of

contribution62 and number of contributors by sector. • The International Social Security Association (ISSA): They mainly submit questionnaires for

completion relating to social security levels and issues.

62 Currently premiums to be paid on insurable earnings are total of 10% with the employees and employers contributing both 5% each.

59

• The Saint Lucia Central Statistical Office: They generally requests aggregate data on the insured, working population and earnings in order to make comparative analyses with other indicators on the macro level and regional level.

• The Saint Lucia Employers’ Federation. The Statistical Department of the NIC provides its management regularly with statistical information compiled from the NIC databases to support management and policy. The databases of the NIC also provide much of the information needed to produce the periodic actuarial reviews. To assess additional data for these reviews the NIC has developed an ongoing relationship with the Central Statistical Office (CSO). The following information is exchanged between the NIC and the CSO: • Annual estimates of the population. The NIC collaborates with the CSO in obtaining information

from the CSO’s Population Census and the Labour Force Survey for projecting the population. • Information on births and deaths is provided by the CSO. • Occupational injuries and sickness information is complied from the databases of the NIC. • Establishments by sector and employment level. Information is compared between the two

agencies. 5.1.5 Maintaining the NIC database

The Saint Lucia National Insurance Corporation maintains computerised data files of all employer, employee and self-employed details and the system keeps track of employer and employee as well as of beneficiaries. This information is kept in 3 subsystems: Registration, Contribution and Benefits. Details of the hardware available for storing, processing and analysing these records are provided in Annex 2(e). These databases are available for tabulation to produce labour statistics. The information in the database and the currently used hardware and software at the NIC allow analysis of the information in the database quite easily through queries, which can be exported to Microsoft Excel format. 5.1.6 The role and size of NIC’s Statistical Department

The Statistics Department of the NIC consists of two statisticians. There are no officers providing administrative and support services. This unit produces the set of tables listed in Annex 3(e) on a quarterly basis. Currently the main tasks of the Statistical department of the NIC are as follows: 1. To provide detailed analysis of NIC’s core functions: a. Collection of contributions b. Payment of benefits 2. Provide relevant data to institutions:

a. ECCB b. Ministry of Finance c. ISSA d. Employers Federation e. Government Statistics Department

60

f. Regional Social Security Schemes 3. Undertaking of research and surveys for various organizations. 4. Research activities for the NIC: Level of compliance and Pension related mostly. 5. At present, undertaking of CLMIS project. 6. Development of training programs for the NIC staff. 5.2 The current LMI data base: conceptual issues 5.2.1 The basic statistical units: contributor person Based on the legal framework for the NIC, contributors are both enterprises and persons. Both types of contributors are defined below. Within the approach of the NIC, a contributor person can be an employee, a self-employed person and voluntary persons. These concepts include: 1. Employee contributor person is a person of 16 years and over, working for a private sector

employer63 for a wage or salary that does not exceed the income ceiling which is currently set64 at EC$5,000 per month65. The employer actually transfers the total contributions due to the NIC. In addition to employees with indefinite contracts, the NIC regulations include under the concept of an employee those with a temporary contract of short duration, casual workers without contract whom are hired on a daily basis, foreign, non-national66 workers and trainees/apprentices. The latter only if they receive an income. Persons, who are absent from work without pay at the time of the reporting, are excluded.

2. Self-employed contributor person: a person of 16 years or older, who works in and operates his/her

own business unit and whose remuneration is directly dependent upon the profits derived from the goods and services produced67. The definition includes: a) Employers; those who employ non-family members in their enterprise b) Own account workers those one-person operations not employing non-family workers on a

regular basis c) Unpaid family workers in own account units. d) Members of Board of Directors not directly employed with the business.

Special categories The NIC database also includes records of persons who are not employees or self-employed as defined above. These special categories include: 1. Persons not employed in St Lucia but contributing or eligible for benefits. 2. Special beneficiaries who did not contribute but are eligible for benefits

63 Up to December 2002 civil service employees, approximately 6000, were not covered by the NIC but by a separate non-contributory (government) pension scheme. However, from 1 January 2003, newly appointed civil service employees will be covered by the NIC. This indicates the need for the NIC to engage in discussions with the Public Service Commission, Ministry of Finance and The Government Statistical Department to explore the possibility of accessing relevant information on this group. 64 This ceiling is reviewed every three years and the last review took place in 2001. 65 EC$2.68=US$1 66 Non-nationals must have a work permit and the duration of their contract must be over two years 67 This includes own consumption which is considered to be part of profits

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Reference date Information on contributor persons is captured at the time of registration of the enterprise and thereafter monthly. The contributor person files are updated using the standard C3 reporting forms (see Annex 4d.), which are submitted each month by the employers/self-employed. These updates of contributor person68 records refer to those employed at the end of the month for which the contributions were due. Double counting There is a conceptual difference between double counting a person employed at one employer and counting a person as many times as he/she is reported by the employers where this person is actually employed. The latter situation refers to so-called “multiple job holders” and is legitimate since it reflects the number of jobs one person holds. Within one year therefore, the NIC may have several employment records for a particular employee, but keeps only one employee record for this person. Double counting implies registration in the database of a person holding just one job, twice or more. This is an error. It is highly unlikely that in the database of the NIC of Saint Lucia, double counting could go unnoticed for an extended period of time since a double counting implies that the contributions for this person would also need to be paid twice. 5.2.2 Reporting unit: contributor enterprise In the NIC’s information system the reporting units on contributors are the enterprises and self-employed. By law all enterprises and self-employed69 in Saint Lucia are required to register their unit and their employees with the NIC upon the start of their activities. It is the obligation of the contributor enterprise/employer to register a contributor person on start of employment and receipt of initial payment. They are required to provide the NIC with a detailed list, including amendments, of all employed persons every month. In these reports information must be provided for all employees at or below the income ceiling by the NIC. Reference date The registration date is the reference date. Reporting and updating enterprise contributor records is similar to that of the contributor person records (see also section 5.2.1). The C3 reporting forms are used and these provide data up to the end of the month for which the contributions were due. 5.2.3. Coverage of the system Given the laws and regulations regarding the NIC in Saint Lucia, the information in its databases covers:

All legally established private businesses, distinguished by their physical locations regardless of their size or industry in all of Saint Lucia. Since 1 January 2003, all new public sector employees will be enrolled into the NIC from this date.

This includes the following categories of workers: private sector (paid employees); statutory/quasi-government; casual/daily paid-government; permanent government – appointment from 2003 onwards; and self-employed. In addition, the National Insurance Corporation Act provides coverage to

68 An insured person is someone for whom at least one-month contribution was registered at the NIC. 69 There is an obligation to register for the self-employed.

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‘Voluntary Contributors’ – a person though not liable under this Act to pay contributions, wishes to do so voluntarily. Coverage with respect to reporting of the particulars of the employee is not comprehensive in these enterprises because of the salary ceiling limiting coverage. This ceiling is currently set at EC$5000.00 per month70. Currently the NIC of Saint Lucia has registered 7025 contributor enterprises and 40,000 contributor persons. The total number of persons insured with the NIC is 65,000. A total of 3300 persons receive long-term benefits and annual averages of 7000 persons receive short-term benefits. The assessment of the NIC in Saint Lucia is that actual coverage of the information in the NIC databases is as follows: • About 80% of total number of paid employees is covered (source: CSO and NIC). • About 30% of total number of self-employed is covered (source: CSO and NIC). In the experience of the NIC coverage of the following specific groups is a challenge, given the peculiar labour market situation of these groups: • The self-employed who are voluntary contributors. • Casual/daily paid public employees with unstable employment relations. • Employees of Statutory Bodies and quasi-government employees. Coverage of these groups by the NIC is approximately 30%71. Coverage is particularly low in the agriculture sector where there are many self-employed and casual/daily paid employees. Another factor influencing the coverage is the product offered to the self-employed. Since only the long term benefits are offered to the self-employed, compliance is very low particularly among those in the informal sector where enforcement is very difficult. 5.2.4. Characteristics of employee or contributor person72 The information contained in the NIC databases comes from two sources. One is the report provided at the time of registration and the other from the monthly submission of information on contributions made. This reporting is done by the contributor enterprise using the standard C3 forms. Records on contributor persons registered with the NIS are kept in three information systems: the registration files, the contributors’ files and the beneficiaries’ files. The registration and contribution sub-systems contain information on each contributor person listed in Table 17.

Table 17: Personal Registration Data Sheet -NIC, St. Lucia Item Registration files Contribution files Person identifier number73 + + Name + + Location of employer74

70 Approximately 8% of total NIC active contributors are either at the ceiling or above. 71 This estimate is based on Labour Force Survey and NIC data. 72 The Director of the NIC has the legal authority to amend the various filing requirements from employers. 73 This number is unique and identifies the sex and the year and quarter of birth of the person. This number is a permanent record.

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Item Registration files Contribution files Age (date of birth) + + Sex + + Occupation + - Marital status + -

+ = Yes - = No The NIC’s source document does not require the employer to provide information for classifying the occupations of employees. This precludes the NIC from presenting and analysing information by occupation. However, the C3 form can be regarded as the single most important instrument that dictates the type of LMI that can be derived. For that reason, the ‘variables/components’ and ‘level of compliance’ of this form would significantly impact on the completeness and dependability of LMI. In that regard, the performance of the NIC during the years 1998 to 2002 reflected one of continuous improvement in the level of compliance. 5.2.5 Characteristics of employer/self-employed or contributor business Similarly to the contributor person information, the NIC updates information on contributor enterprises from the two sources mentioned above: the report submitted at the time of registration of the enterprise and the monthly submission of information on contributions made, form C3. Records on contributor enterprises registered with the NIC are kept in two databases, the employer’s registration file and the employer contributor file. These NIC sub-systems contain information on each contributor enterprise listed in Table 18 below:

Table 18: Registration Data Sheet for Business Units, NIC, St. Lucia Item Registration Files (1) Contributor Files Business identifier number + + Name + + Location (province) Address + + Institutional sector + + Industry75 + + Total number employed persons76 + + Total payroll ($) - - Total NIC contributions ($) per employee

+ +

(1) Employers are categorized into three groups: active, dormant and closed. + = Yes - = No

74 The current procedures for coding/classifying the contributor enterprise according to the International Standard Classification of Industries (ISIC) are done by clerical staff and this allows for possible inaccurate coding. 75 See earlier note on coding of industry of the employer 76 Include the employees earning above the ceiling.

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5.2.6 List of definitions based on current practices Terminology Description Active Insured persons (active, current contributions)

Active insured persons are individuals on whose behalf at least one contribution (one month) payment has been paid to the NIC during a given year/financial year.

Employee Persons with at least one month contribution in the year in review. Casual worker Persons employed on a day-to-day basis. Ceiling on insurable earnings The maximum amount of insurable earnings that is subject of the

payment of contributions to the NIC. Earnings (Qu30)

Gross earnings

Insurable earnings The wage received as a result of employment services rendered to an employer, which are subject to the payment of contributions to the NIC. Insurable earnings include all the gross earnings received by or on behalf of the employee/insured person including: overtime; all allowances (excluding travel, Christmas bonuses, production bonuses, severance payments and terminal gratuities); commission or profits on sales; payment on account of night or shift work; service charge; and holiday pay or other amounts set aside out of employee’s remuneration throughout the year or part of the year to be paid periodically.

Earnings ceiling Contributions are based on a ceiling of $5000 monthly. Establishment Employer (separate registration number will be treated as different

employer). Industry code International Standard Industrial Classification (ISIC) Of All

Economic Activities. Benefit Refers to all benefits provided by the NIC Act of 2000. Beneficiary person Recipient of the NIC benefits. Beneficiary report Necessary documents Contributor-Person An employee or self-employed contributing to the scheme with at

least one-month contribution in the relevant year Contributor enterprise Employer who pays contribution to the NIC. Contributor report Necessary document i.e., C3, registration forms etc. Contributions Contributions refer to the contributions of employers and employees.

The percentage of insurable earnings upon which contributions are based is 10% (5% employer and 5% employee).

Occupation Contributor work activity 5.3 The current LMI data base: data collection issues 5.3.1 Identification of reporting units including networking with other national agencies and registers used In accordance with the NIC Act of 2000, #18, all enterprises and all persons they employ of age 16 and above who are at or below the earnings ceiling, must register with the NIC at the commencement of their operations. In defining employees who must be registered there is no distinction between trainees,

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casual or temporary staff. Once payment is received, it is the responsibility of the employer to ensure that the person is registered. The self-employed must also register at the commencement of their operations. Registration of establishments/enterprises, usually takes place when the business first begins operation or when a NIC Inspector finds out of a new business and enforces registration (NIC inspectors visit/audit employers bi-annually). Normal ongoing registering of new employees by registered contributor enterprises takes place on a monthly basis through the submission of the C3 form, as employers/self-employed submit a monthly declaration of workers and wages. When a contributor enterprise/unit ceases to operate, that is, goes out of business, merges/is taken over, dies, retires, etc., this is will be reflected in the NIC register with a time lag of about two week. Compliance procedures The C3 forms are processed on a daily basis by the Central Records Department of the NIC. The Compliance Department does the monitoring of employers regarding both payment of contributions and submission of C3 documents. Continued non-compliance of an employer is referred to the Legal Department for necessary action. The penalty for non-compliance with registration, or for false reporting, late reporting, no reporting of changes is fines. . The NIC has no system of incentives such as bonuses, reduced contributions etc., for compliance with registration obligation or timely and correct reporting. 5.3.2 Updating information from the reporting unit 5.3.2.1 Frequency of reporting The initial collection of information is done at registration. A birth certificate or passport is used to verify name and date of birth. The form C3 is a pre-printed form sent to employers to capture information on paid employees, and the contributions due on a monthly basis. However, updating the information in the NIC database poses several challenges, including the following:

1. Some level of non-compliance particularly with the self-employed, the informal and micro/small enterprise sector as well as paid employees on short contract and casual workers.

2. Late reporting by enterprises resulting in a time lag between the occurrences of a change in the

status of a contributor person and updating the record concerned in the databases of the NIC. 3. Outdated information on the Industry. The C3 form does not include provision for updating the

information on industry of the contributor enterprise and it is common for enterprises not to report a change in industry if this occurs. There is no system in place to ensure that the NIC is informed of such changes.

4. Insufficient coverage of the self-employed and in particular of the informal sector. The estimate is

that about 30% self-employed are registered with the NIC. Although it is a legal requirement for self-employed persons to be registered, enforcement has been a challenge.

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5.3.2.2. What updated information is available The computerized files of individual businesses, contributors and beneficiaries of the NIC are available for tabulation for the production of aggregate statistics on the labour market. However, the legal provisions regarding the confidentiality of these individual records set constraints on access to these files by non-NIC persons. These constraints do not exist for NIC personnel and the NIC is prepared to produce tables, such as those included in Annex 5, on a monthly, quarterly, bi-annually or annual basis. Such aggregate statistics could be produced either based on the total number of records in the databases or on a sample of contributor establishments/ enterprises, of contributor persons or beneficiary persons. 5.3.2.3 What information is updated in the database Utilizing the information contained in the C3 form the NIC updates the following information in Table 19 in its databases after processing and checking the data for consistency.

Table 19: Information updated in the database, NIC, St. Lucia


Person identifier number + + Monthly + + Monthly Name (person) + + Monthly + + Monthly Age (date of birth) - - - - - - Sex + - - + - - Marital Status - - - + - - Level of Education - - - - - - Address - - - - - - Commencement date of employment + + Monthly + + Monthly Occupation - - - - - - Wage/Salary - - - - - - Pay frequency (week/fortnight/ month - - - - - - Job description - - - - - - Business identifier number + + Monthly + + Monthly Name employer + + Monthly + + Monthly Total payroll) in enterprise - - - - - - Employer contribution to NIC + + Monthly + + Monthly Employee contribution to NIC + + Monthly + + Monthly Total contributions + + Monthly + + Monthly

+ = Yes ; - = No Frequency monthly, quarterly, biannually, annually

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5.3.2.4 Time lag In order to be able to interpret statistics compiled for a specific reference date from the databases of the NIC, it is necessary to distinguish between the following two types of time lags in the process of updating records: 1. The reporting time lag: The time elapsed between the date on which a contribution77 is due and

when it is actually received by the NIC. The contributions due on the 31 of January 2002 indicate those who were employed on that date. However, statistics referring to 31 of January cannot be compiled on that same date since the NIC does not receive (all) contributions/reports on this date. The reporting time lag can be defined as the time it takes to receive all or almost all contributions/reports from the employers/self-employed. This lag will determine how long the analyst will have to wait before credible employment statistics that refer to a specific date, can be produced. In Saint Lucia approximately 54% of contributions/C3s are submitted within 7 days. Within 21 days approximately 85% comply and the remaining 15% comply within 8 weeks.

2. The processing time lag: The time elapsed between the date on which the contribution/report is

received and when it is posted to the database. This lag is mainly due to processing and other organisational issues. In Saint Lucia contributions and C3 records are entered on a daily basis. It is therefore assumed that C3s for a particular month are processed the following month.

3. Based on these two types of time lag the total time lag in the system in the NIC information

system in Saint Lucia is estimated to be 8 weeks. 5.3.2.5. Conclusion: reference date and production of data Based on the current practices of the NIC in Saint Lucia it is recommended that tabulation of data should be done quarterly78. This implies that data will be produced for the following four reference or calendar dates:

Reference date Earliest data for producing the data79 31 December 1 March 31 March 1 June 30 June 1 September 30 September 1 December

5.4 Recommendations 5.4.1 Objectives The National Insurance Corporation of Saint Lucia is a potential source for labour statistics. It has the capacity to develop a comprehensive database of total paid employed persons. The major conclusion from the evaluation of the NIC database is that it is currently possible to produce on a relatively frequent basis a selected number of indicators on: 77 Or report on the contributing persons (employees) 78 As discussed in section 5.3.2.4, the total time lapse in the system is 8 weeks if a norm of 85% of the contributor enterprises completing reporting is adopted. For contributor reporting units for which there has been no reporting for the reference date, the last updated information should be used in tabulation. The total number of contributor enterprises for whom no update was received for the reference date should be included in each table as a note. 79 Considering the total time lag

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It should be noted that this approach excludes the self-employed sector, as well as those in the informal sector whether they are in paid employment or self-employed. It is recommended that the NIC consider including the self-employed and informal sector in its source document. Also the NIC in collaboration with the Government Statistical Department could explain to employers, the potential for human resource management by the identification of occupational clusters/scarcity and possibility of job placement, which the inclusion of occupation in its source document can facilitate. The approach of using the NIC as a source of labour statistics will also exclude the collecting and producing of information on the unemployed population or other beneficiaries. However, more information could be produced from this data source to meet the mid and long-term objectives detailed below, provided that some changes are adopted in the system of data collection and processing. As such, the next section outlines specific objectives that are recommended in order to produce the necessary information. 5.4.2 Specific objectives and time line 1. Short term objectives that can be attained immediately without any changes in the system.

a. Perform an initial, mechanical update of the industry code of all contributor enterprises using the Industry Classification Codes of the Central Statistical Office of Saint Lucia (October 2003).

b. Resolve the issue regarding the updates with respect to changes of occupation by developing a terms of reference for and outsourcing the job to (January 2004): i. Include the job title on the form used at the time of registration as well as in the

C3 form used for monthly reporting to allow inclusion of occupation in the NIC databases.

ii Design the procedures and training programme to generate coding of occupations of contributor persons registered based on the job title submitted by the employers. This includes assessing the possibilities of using electronic submission of information by the employers as well as options for mechanical or mechanically assisted coding of job titles into the International Standard Classification of Occupations.

iii Introduce a link between the information subsystem that relates the monthly payments to Contributor files and sub-system relating to Registration.

c. Occupational Health and Safety (December 2003): Develop a terms of reference to resolve conceptual, data processing and tabulation issues regarding the information on benefits for illnesses and injuries which occur in the workplace. This to ensure that the information captured can be used effectively for the purposes of the NIC as well as Labour Statistics.

d. LMI on the Government and the Statutory Boards (October 2003): Determine with the users of labour market information if the tables to be produced should provide information on Public sector employment and the Statutory Boards separately.

e. Design and produce the following tables to be compiled from the current NIC database by June 2003 (See Annex 5); i. Table 1 series: Number of paid employee contributor persons and average

monthly wage earnings by sex, institutional sector and industry.

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ii. Table 2 series: Number of private sector paid employee contributor persons and average monthly wage earnings by sex and employment size of enterprise.

iii Table 3 series: Number of paid employee contributor persons and average monthly wages earnings80 by age and sex.

iv Table 5 series: Distribution of paid employee contributor persons in monthly earnings81 groups by institutional sector and sex.

f. Institutionalize a working relationship with the Central Statistical Office that will

include: i. Agreement on collaboration on coding of the occupations (ISCO) and the

industry (ISIC) ii. Consensus on the format of tables to be produced iii Joint plan and implementation of an awareness campaign and training seminar

for users on the tables produced and particularly their relation with other labour market information available. The campaign/seminar should include issues such as the regular reporting on changes in the occupation of employees, and the need for employers to declare the full wage rather than the insurable wage.

iv. Considering the NIC’s low coverage level of paid employed persons in the agriculture sector (15%), commitment to provide a sub-database on this group by the Government Statistical Department should be formalized to ensure continuity.

g. Formalize an agreement with the Ministry of Finance and Economic Affairs to provide a sub-database on permanent central government employees whose appointments were before 2003.

2. Mid term objectives that can be attained with some minor adaptations to the system.

a. Identify an assessment of measures needed to ensure that coverage of the formal sector is maximized. This should include the costs involved in an effective redeployment of staff, particularly compliance inspectors.

b. Introduce a jointly developed national enterprise/establishment register that is compiled and used by both the NIC and the CSO. The register should include the classification of the industry of each enterprise/establishment. In the context of finalising this project activity it is recommended that a terms of reference be developed for the completion of this enterprise register which will provide the NIC with an up-to-date Economic Activity Code based on the ISIC.

c. The introduction of a unique, national business number for each establishment/enterprise in Saint Lucia.

d. Plan and implement the collection of additional data needed by the NIC as well as other LMI users including: i. Declaration of total earnings including amounts above the earnings ceiling (for

contributions) of $60,000.00 annually. ii. Produce Table 4 series after information on the job title is included on the C3

form and in the NIC databases (see Annex 5). The occupation of contributors is not up to date and consequently it is recommended that the production of these tables be postponed until the issues relating to the occupation field in the records are resolved.

80 All tables on “earnings” should include an explanatory note specifying the definition of earnings, particularly the NIC earnings ceilings, which limit the coverage of statistics on earnings derived from its databases. 81 See earlier note on earnings

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iii Separate filings for geographically distinct operations of the company. This will allow processing of records of enterprise contributors by physical locations.

iv Reduce the response burden on employers.

3. Long term objectives that can be attained only after significant changes. a. Developing insurance services specifically targeted and tailored to the needs of the self-

employed, particularly the micro, small enterprises and the informal sector. Such programmes would increase the de facto coverage of the NIC, its database and consequently its employment statistics on these sectors.

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6 __________________________________________________________________________________

St. Vincent and the Grenadines National Insurance Scheme

Duane Allen82

6.1. Background

6.1.1. History of the St.Vincent and the Grenadines National Insurance Scheme

The St.Vincent and the Grenadines National Insurance Scheme (NIS) which beganJanuary 5, 1987, under the NIS Act no. 33 of 1986, replaced the National Provoperated from 1970. The objective of the NIS is to provide a system of social securithe Grenadines Within the framework of these objectives the following benefits and assistance ardifferent programmes as listed below: 1. Short-term Benefits

a) Sickness b) Maternity benefit c) Maternity grant

2. Long-term benefits

a) Funeral grant b) Invalidity benefit c) Survivors' benefit d) Age benefit e) Age grant f) Non-contributory g) Assistance age pension

3. Employment Injury83

a) Employment injury medical b) Employment injury benefit c) Employment disablement d) Death benefit e) Constant Attendance Allowance

82 Statistical Officer, National Insurance Scheme of St. Vincent and the Grenadines 83 Employment Injury benefits were introduced in 1997.

its operations on ident Fund which ty in St.Vincent &

e provided by the

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f) Funeral Grant Over the period of its development the contributions to the NIS in Saint Vincent and the Grenadines have increased to an average of 21,000 contributors per month in 2002. Similarly the total number of benefits paid grew to 7,438 per fortnight at the end of 2002.

6.1.2.Formal mandate and structure of the NIS in Saint Vincent and the Grenadines The formal mandate of the NIS is laid down in the NIS Act and Regulations No. 33 of 1986. . The management of the institution is made up of the following units: • Accounting • Administration • Benefits • Compliance • Contributions and Registrations

6.1.3 Labour Market Information (LMI) usage in the National Insurance Scheme The NIS is one of the main users of LMI in Saint Vincent and the Grenadines since this information is the input for its actuarial reports. These actuarial reports establish credit worthiness of the fund. They advise on the level of the premiums needed to be able to comply with future benefits due, and whether or not income ceilings should be increased. Table 20 below presents an overview of the basic labour market information needed as input for these reports and the current availability of these data:

Table 20: Labour market indicators important to the NIS, St. Vincent and the Grenadines Labour market indicator Periodicity Importance Availability Total population by age, sex, industry and occupation 5 years Very high Acceptable

Working age population by age, sex, industry and occupation 1 year Very high Acceptable

Labour force by age, sex, status in employment, industry, and occupation 1 year Very high Acceptable

Earnings by age, sex, status in employment, industry and occupation 1 year Very high Not

acceptable Occupational injuries/sickness by age and sex 1 year Very high Not

acceptable 6.1.4. Current links with national and international institutions related to provision of LMI or mutual exchange of information In order to access the input data needed for its actuarial reports the NIS has developed ongoing relations with the Central Statistical Office (CSO) of the Ministry of Finance and Planning. This relationship focuses on information from the Population Census and annual population estimates which the CSO produces. The collaboration with the CSO is mutual as the NIS provides the CSO with information on earnings for categories of employees (used in System of National Accounts computations). The registrar’s office provides information on births and deaths. This information is used by CSO to provide

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annual population estimates to update the census population figures. Occupational injuries and sickness information is complied from the databases of the NIS. 6.1.5 Maintaining the NIS database The NIS maintains computerised data files of all employers and employees and keeps track of contributions as well as benefit payments. This information is kept in 3 subsystems - Registration, Contribution and Benefits. The current system was set up in July 1994. At the time of computerization, all historical information relating to the National Insurance Scheme was entered. Annex 2(f).provides the details of hardware available for storing, processing and analysing these records. 6.1.6 The role and size of the National Insurance Statistical department There is no stand-alone statistical department at the NIS. The staff consists of a statistical officer, (Duane Allen, Bsc Actuarial Science), and a part-time assistant. Both report to management. His main tasks are: 1. Actuarial

• Prepare monthly statistics on contributions, compliance and arrear status of employers. • Provide quarterly, a list of persons turning sixty for Customer Services

2. Research

• Prepare quarterly financial statistics for the Eastern Caribbean Central Bank • Conduct research

3. Statistical

• Provide other statistics, which from time to time may be needed.

6.2 The current LMI data base: conceptual issues 6.2.1. The basic statistical units: contributor person In the context of the NIS, a contributor-person can be an employee, a self-employed or a voluntarily insured person. The definition for each category is as follows: 1. An employee-contributor-person is defined as anyone, aged between 16 and 60 years, who is

working for an employer. In addition to employees with indefinite contracts, the NIS regulations also include persons with contracts of short durations (temporary); casual workers without contract who are hired on a daily basis; and foreign, non-national workers and trainees/apprentices as long as they receive an income. Persons, who are absent from work without pay at the time of the reporting, are excluded.

2. A Self-employed contributor-person is a person between 16 and 60 years of age who works in and

operates his/her own business unit, and whose remuneration is directly dependent upon the profits derived from the goods and services produced84. This definition includes: a. Employers85 (those who employ non-family members in their enterprise).

84 This includes own consumption which is considered to be part of profits 85 An employer has the option of treating themselves as employees of the business or as being self-employed.

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b. Own account workers (one-person operations, with or without family members). c. Members of production co-operatives.

3. Voluntary-contributor-person is anyone who is not currently employed in St. Vincent and the Grenadines but wishes to continue making contributions towards a pension86.

The NIS database also includes records of persons who are not employees, self-employed or voluntary contributors as defined above. These special categories include beneficiaries who did not contribute but are eligible for benefits. Reference date An employee’s registration date is taken as reference date. Registration files are not updated except in ad hoc cases (For example changing a female’s surname to that of her spouse). Double counting There is a conceptual difference between double counting a person employed at one employer and counting a person as many times as he/she is reported by employers where this person is actually employed. The latter situation refers to so-called “multiple job holders” and is legitimate since it reflects the number of jobs one person holds. Within one year therefore, the NIS may have several employment records for a particular employee, but keeps only one employee record for this person. Double counting implies registration in the database of a person holding just one job, twice or more. This is an error and is highly unlikely to occur since it means that the contributions of the person must be paid twice. It is nevertheless possible for an individual to be registered more than once (i.e., have more than one employee record). This occurs if a previously registered person changes employment and his/her new employer applies, successfully, for a new number. This erroneously creates a new employee record. 6.2.2 Reporting unit: contributor enterprise Enterprises, the self-employed and the voluntary contributors are the reporting units in the information system of the NIS. By law all enterprises in Saint Vincent and the Grenadines are required to register their unit. This must be done within seven days after the start of their activities87. It is the obligation of the contributor enterprise/employer to register a contributor-person within three days after employment was taken up. The date of employer’s registration is the reference date for registration information. 6.2.3 Coverage of the system In keeping with the NIS laws and regulations, the information in its databases covers:

Both the private and the public sector,88all industries and all legally established businesses, distinguished by their physical locations, regardless of their size in all of Saint Vincent and the Grenadines.

The legal framework of the system permits voluntary participation of the self-employed in the NIS. However, the assessment of the NIS is that as a result of the voluntary nature of the participation of the 86 Vincentians working abroad (e.g., USA, United Kingdom) are classified as contributing voluntarily 87 The employer has the responsibility to register his/her employees. If an employee fails to present his NIS card/ Number to the employer within 14 days of being employed, a new registration form should be filled in and sent to the Scheme. All new applications are checked for double registration. 88 The public sector is defined as including central government and local government, state owned enterprises and other public sector entities.

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self-employed, approximately only 10% of this group are covered. This contrasts with an estimated coverage of about 95% of total paid employees. It is estimated that about 60% of total employment is covered by the NIS. This discrepancy between legal coverage and actual coverage of paid employment is due mainly to the level of delinquency. For the self-employed it is the voluntary participation which creates this gap. 6.2.4 Characteristics of employee or contributor-person89 The information about employees contained in the NIS database is obtained from two sources. Employees provide data at the time of registration, and at the end of each month employers submit C5 forms (See Annex 4e) to the Scheme. Paragraph 6.2.5 gives further details on data collected on C5 forms. The two sub-systems contain information listed in Table 21 below on each contributor person:

Table 21: Personal Registration Data Sheet, NIS, St. Vincent and the Grenadines Item Employee

registration File Employee/ employer

contributor file Person identifier number + + Name + + Location of employer (Address) + + Industry of employer - + Institutional sector of employer - + Employment size of employer - + Age (date of birth) + - Sex + - Occupation - - Marital status + - Number of dependants - - Status in employment - + Earnings (or similar) ($) + + NIS contribution ($) - + Hours of work - - Number of weeks worked + +

+ = Yes - = No For NIS purposes, the income ceiling for compulsory registration is currently set at EC$3770 per month90. (See Table 22 below for an overview of the adjustments to the ceiling). Employees who earn less than EC$15.00 per week are not required to register or pay contributions.

89 The National Insurance Scheme of Saint Vincent and the Grenadines has the legal authority to amend the various filing requirements from employers. 90 Up from EC$3250 per month last year. EC$2.68=US$1

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Table 22: Maximum monthly and weekly earnings

ceilings by year of adjustment (not included with other standardized tables)

Year implemented Monthly ceiling

1987 $1,670.001995 – May $2,600.002000 – Jan $3,250.002003 – Jan $3,770.00

6.2.5.Characteristics of employer/self-employed or contributor business The information on employers comes from two sources, that is, employer registration files and employer/employee contribution files. The standard reporting form, – the C5s - are submitted periodically, (weekly, monthly or fortnightly), to coincide with the frequency of wage payments. They provide the NIS with a detailed list, including amendments, of all persons employed during the week, fortnight or month and their incomes (up to the ceiling) for that period. This information is used to up date the employer/employee contribution files. The two subsystems contain information listed in Table 23 below:

Table 23: Registration Data Sheet for Business Units, NIS, St. Vincent and the Grenadines

Item Employer Registration File

Employer/ employee Contributor File

Business identifier number + + Name + + Location91 (address) + + Institutional sector - - Industry92 + + Number of Employees: male/female - + Employee Names - + Employee Wages - + Job Description - - Employer contribution - + Employee contribution - + Total payroll(1) ($) - + Total NIS contributions ($) - +

+ = Yes - = No

91 The region code was obtained from the Statistical Office. It conforms to the Census Divisions in Saint Vincent and allows for important for comparisons between the NIS and the Government’s Statistical Department. 92 The classification and coding system used is the United Nations International Standard Industrial Classification of All Economic Activities – Third revision (ISIC rev 3).

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6.2.6 List of definitions based on current practices Terminology Description Benefit Claims paid to persons or employers who were insured against the

contingencies of death, sickness, employment injury, disability or retirement.

Beneficiary person One who is in receipt of a benefit Contract worker A person entering a legal or business agreement for a specified

amount and for a specified period

Contributor Employers, self-employed or voluntarily insured persons Contributor enterprise Employers Contributor person Used interchangeably with contributors Casual worker A person who is not on the permanent establishment of an institution

and is not on contract Earnings Salaries or wages received by an employee for a period Earnings ceiling The maximum wage on which contributions are payable. Currently

set at EC$3770 Enterprise branch One of many locations of an enterprise Enterprise An employer, whether a company as legally defined or otherwise Establishment Used interchangeably with enterprise branch Employee Anyone who is working for an employer for pecuniary remuneration Gross earnings Total earnings before any deductions are made Industry code A 4-digit code distinguishing types of economic activity Net Earnings Earnings after deductions are made Occupation An employee's profession or employee's job title Occupational code A 4-digit code that distinguishes types of occupation (ISIC) Self-employed A person gainfully employed with in St Vincent and the Grenadines

who works for himself. He can also be called a working proprietor Total time lag The total time elapsed between when a contribution is due and when

it is entered on the system Reporting time lag The time elapsed between when contribution is due and when the

contributor has reported it Processing time lag The time elapsed between submission by an employer and when it is

entered Working proprietor Any person who owns a business and is an employee of that business Penalties Payments to the NIS for not complying with the regulations

6.3 The current LMI data base: data collection issues 6.3.1 Identification of reporting units including networking with other national agencies and

registers used Registration of establishments/enterprises, usually takes place when the business first begins operation or when a NIS inspector, who makes regular checks, finds unregistered new businesses. In these cases registration will be enforced. The legal provisions also make it compulsory for every new business to

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register with the NIS 7 days after employing their first employee. Normal ongoing registering of new employees by registered contributor enterprises takes place on a monthly basis. Every month employers submit a record of workers and wages paid. There is no distinction between trainees, casual or temporary staff. Once employment commences it is the responsibility of the employer to ensure that the person is registered. Registration of self-employed is voluntary and they also submit monthly declarations. When a contributor enterprise/unit ceases to operate, that is, goes out of business, merges/is taken over, dies, retires, etc, this is will be reflected in the NIS register with a time lag of about one week.. Compliance procedure The compliance department of the NIS deals with all compliance issues. Penalties are applied for non-compliance with the obligation to register, or for false or late reporting, and no reporting. Fines, garnishing of bank accounts, public announcements in newspapers and jail sentences are the penalties applied. The NIS has no system of incentives such as bonuses, reduced contributions etc., for compliance with registration obligation or timely and correct reporting. 6.3.2 Updating information from the reporting unit 6.3.2.1 Frequency of reporting Information on the specifics of employed persons is regularly updated using the information contained in the C5 forms which are submitted monthly by the employers/self-employed for contributions paid. However, updating the information in the NIS database poses several challenges, including the following:

1. Non-compliance. Almost 9% of “active employers” did not pay contributions for December 2002. This level of delinquency applies to registered enterprises that are coded as “Active” on the database. The compliance department monitors these codes. This does not include businesses that never registered with the NIS.

2. Late compliance. Contributor enterprises do not report regularly and in a timely fashion.. 3. Outdated or missing information on the occupation of the contributor person. There are two

reasons for this. On the one hand employers do not provide the ‘Job Description’ on the C5 form as it entails extra work. On the other hand there is not much pressure coming from the NIS on this issue since this information is not essential to the process of computing benefits and collecting contributions.

4. The combined effect of a poorly developed classification on the nature of industrial injuries/illnesses in the information system and limited occupational data. Inefficient procedures for the collection, coding and recording of data, resulting in unreliable labour statistics in the insurance and other sectors.

5. Outdated information on the Industry. It is common for enterprises not to report a change in industry if this occurs. There is no system in place to ensure that the NIS is informed of such changes.

6. Insufficient coverage of the self-employed and in particular of the informal sector. Only a very small percentage of the informal sector (about 10%) is registered with the NIS in Saint Vincent and the Grenadines.

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6.3.2.2 What updated Information is available The computerised files of individual businesses, contributors and beneficiaries of the NIS are available for tabulation for the production of aggregate statistics on the labour market. However, the legal provisions regarding the confidentiality of these individual records set constraints on access to these files by non-NIS persons. These constraints do not exist for NIS personnel and the NIS is prepared to produce tables, such as those included in Annex 5, bi-annually or annually. Such aggregate statistics could be produced either based on the total number of records in the databases or on a sample of contributor establishments/ enterprises, of contributor persons or beneficiary persons. 6.3.2.3 What Information is updated in the database Utilising the information contained in the C5 form the NIS updates the following fields in its contributor files after processing and checking the data for consistency. The registration files are only entered and checked for consistency on registration.

Table 24: Information updated in the database, NIB, St. Vincent and the Grenadines

Registration file Contributors file Variable Included Updated Frequency Included Updated Frequency

Person identifier number + - At reg. + - - Name (person) + - At reg. + - - Age (date of birth) + - At reg. + - - Sex + - At reg. + - - Marital Status + + Ad Hoc - - Level of Education - - - - - - Address + + Ad hoc - - - Commencement date of employment + +

New employ. + + -

Occupation + - - - - - Wage/Salary - - - + + Wk/frt/mthly Pay frequency (week/fortnight/month) - - - + + Wk/frt/mthly Job description - - - - - - Business identifier number + - - - - - Name employer + - - - - - Nature of business (ISIC) + + Ad hoc - - - Institutional sector (public vs. private sector) + + Ad hoc - - - Location/address + + Ad hoc - - - Number of Employees (male/female) in enterprise + - - + + Wk/frt/mthly (Total payroll) in enterprise - - - + + Wk/frt/mthly

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Employer contribution to DSS - - - + + Wk/frt/mthly Employee contribution to DSS - - - + + Wk/frt/mthly Total contributions - - - + + Wk/frt/mthly + = Yes ; - = No Frequency: monthly = mthly; Fort night = frt; Weekly = wk 6.3.2.4 Time lag lag In order to be able to interpret statistics compiled for a specific reference date from the databases of the NIS, it is necessary to distinguish between the following types of delays in the process of updating records: 1. The reporting time lag: The time elapsed between the date on which a contribution93 is due and

when it is actually received by the NIS. The contributions due on the 31 of January 2002 indicate those who were employed on that date. However, statistics referring to 31 of January cannot be compiled on that same date since the NIS does not receive (all) contributions/reports on this date. The reporting time lag can be defined as the time it takes to receive all or almost all contributions/reports from the employers/self-employed. This lag will determine how long the analyst will have to wait before credible employment statistics that refer to a specific date, can be produced. In NIS the reporting time lag is 3 months since about 78.1% of the contributions or reports are received within 3 months after a due date.

2. The processing time lag: The time elapsed between the date on which the contribution/report is received and when it is posted to the database. This lag is mainly due to processing and other organisational issues. In the case of the NIS in Saint Vincent this lag is normally two weeks.

Table 25:

Active enterprises in Saint Vincent and the Grenadines by time lag between submission of the contribution or C5 form and the month for which the

contributions were due in 2002

Time lag in submitting payment & C5 forms

Frequency %

Current 1,352 66.2 One month in arrears 118 5.8 Two months in arrears 62 3.0 Three months in arrears 62 3.0 Sub total 78.1 Over three months 267 13.1 Paid no contributions/ Other 180 8.8 Total Active employers 2,041 100.0

The time lag on reporting is slightly different for monthly paid Civil Servants. These public sector employees number about 4,000 representing some 18% of the working population. The Government submits C-5s for daily paid (casual/temporary) on a monthly basis similar to the ordinary employer but for monthly paid Civil Servants, the information is electronically entered using magnetic tapes.

93 Or report on the contributors persons (employees)

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Currently, the NIS is encountering problems in doing this,and has not entered any data since January 200194. Computation of benefits is not affected since the NIS has a “hard copy” of the C-5s. However, since the Government has reliable information on this section of the employed population the NIS databases can be updated mechanically once a solution for this problem is worked out. Based on these two types of time lags the total time lag in the system in the Saint Vincent and the Grenadines is estimated to be 5 months. 6.3.2.5 Conclusion: reference date and production of data Based on the current practices of the NIS in Saint Vincent and the Grenadines it is recommended that tabulation of quarterly data should be done six months after the reference period. This implies that data will be produced for the following four reference or calendar dates:

Reference date Earliest date for producing the data95 31 December 30 June 31 March 30 September 30 June 31 December 30 September 31 March

6.3.3. Institutional issues There is limited and in many cases no classification of employee occupation. The codes were intended to be ISIC, but because it is not essential to the administrative process, little attention has been paid to it.

6.4 Recommendations 6.4.1 Objectives The Saint Vincent and the Grenadines National Insurance is a potential source for labour statistics. The major conclusion from the evaluation of the NIS LMI database is that it is currently possible to produce on a relatively frequent basis a selected number of indicators on:

Total paid employment and wages, in the formal or registered sector by sex, and by institutional sector, industry and occupation96.

It should be noted that this approach excludes the self-employed sector, as well as those in the informal sector whether they are in paid employment or self-employed. It also excludes collecting and producing information on the unemployed population or other beneficiaries. More information could be produced from this data source provided that some changes are adopted in the system of data collection and processing, to meet mid and long term objectives.. Specifically the following objectives are recommended: The following detailed objectives and a time frame are suggested: 1. Short term objectives: 94 The programmers are working on it. 95 Considering the total time lag. 96 Statistics by occupation can only be produced once occupations are properly coded

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a. Perform an initial, mechanical update of the industry code of all contributor enterprises using the Industry Classification Codes of the Statistical Department of the Ministry of Finance and Planning of Saint Vincent and the Grenadines.

b. Resolve the issue of the missing information on occupation by developing a terms of reference for and outsourcing the job to: i. Increase the response on employees’ job descriptions and increase the

awareness of the importance of this information amongst all stakeholders. ii. Introduce a link between the Contribution sub-system and the information

available from the monthly payments to provide for regular updates on occupations.

c. Occupational Health and Safety: Develop a terms of reference to resolve conceptual, data processing and tabulation issues regarding the information on benefits for illnesses and injuries which occur in the workplace. This to ensure that the information captured can be used effectively for the purposes of the NIS as well as for Labour Statistics.

d. Develop a terms of reference to resolve conceptual, data processing and tabulation problems of input data from the public sector.

d. Design and produce tables to be compiled from the current NIS database on (See Annex 5); i. Table 1 series: Number of paid employee contributor persons and average

monthly wage earnings by sex, institutional sector and industry. ii. Table 2 series: Number of private sector paid employee contributor persons and

average monthly wage earnings by sex and employment size of enterprise. iii. Table 3 series: Number of paid employee contributor persons and average

monthly wages earnings97 by age and sex. iv. Table 5 series: Distribution of paid employee contributor persons in monthly

earnings98 groups by institutional sector and sex . f. Institutionalize a working relationship with the Central Statistical Office that will

include: i. Agreement on collaboration on coding of the occupations (ISCO) and the

industry (ISIC) ii. Consensus on the format of tables to be produced

iii. Joint plan and implementation of an awareness campaign and training seminar for users on the tables produced and particularly their relationship with other labour market information available. The campaign/seminar should include issues such as the regular reporting on changes in the occupation of employees, and the need for employers to declare the full wage rather than the insurable wage.

3. Mid term objectives that can be attained with some minor adaptations to the system:.

a. Implement an assessment of measures needed to ensure that coverage of the formal sector is maximised. This should include the costs involved in an effective redeployment of staff, particularly compliance inspectors.

b. Implement a jointly developed national enterprise/establishment register that is compiled and used by both the NIS and the CSO. The register should include the classification of the industry of each enterprise/establishment. In the context of finalising this project activity it is recommended that a terms of reference be developed

97 All tables on “earnings” should include an explanatory note specifying the definition of earnings, particularly the DSS earnings ceilings, which limit the coverage of statistics on earnings derived from its databases. 98 See earlier note on earnings

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for the completion of this enterprise register that will provide the NIS with an up-to-date Economic Activity Code based on the ISIC.

c. The introduction of a unique, national business number for each establishment/enterprise in the country

d. Plan and implement the collection of additional data needed by the NIS as well as other LMI users including: i. Declaration of total earnings including amounts above the earnings ceiling (for

contributions) of $60,000.00 annually. ii. Separate filings for geographically distinct operations of the company. This

will allow processing of records of enterprise contributors by physical locations.

iii. Reduce the response burden on employers. iv. Produce Table 4 series if the problems related to the occupation are resolved.

3. Long term objectives that can be attained only after significant changes:

a. Developing insurance services specifically targeted and tailored to the needs of the self-employed, particularly the micro, small enterprises and the informal sector. Such programmes would increase the de facto coverage of the NIS, its database and consequently its employment statistics on these sectors.

the labour market potential of nis databases in six ... · i the labour market potential of nis...

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