By ELVIN BAILEY
That’s what the older folks used to say in my youth to refer to someone who, having left school entered into an apprenticeship system, usually in the construction industry. This industry has continued its importance to the Federation: It was responsible for the construction/renovation/demolition of 300 buildings in Nevis alone in 2007 and St. Kitts was much bigger. For its part, Social Security, through its partner agencies – NHC, NHLDC, SKNDP, and through the financial institutions in the country – has invested over $100 million in this sector in recent times. This figure is a conservative one.
Our data indicates that for the period January to March 2008, there were 332 businesses within the construction sector, employing no less than 3300 persons or 12% of the Federation’s workforce. It generated EC$1,315,660 in contributions, thereby suggesting a wage base of at minimum $13.2 million for the period. For Social Security, within the private sector, it is the 4th most important contribution base, after Hotels/Restaurant, Wholesalers/Retailers and Financial Institutions.
These are very impressive figures! (For clarity, the ILO definition for construction includes plumbers, electricians, installers of equipment such as air conditioners and alarms).
As I interacted with construction workers, it dawned on me that they are largely unaware of their importance to the economy and unaware of their rights and obligations with respect to Social Security. This article is therefore dedicated to them and attempts to clear up/answer misconceptions and questions that they may have.
Many of our construction workers are non-nationals, and mostly from the Caribbean region, including the Dominican Republic. Those from CARICOM are covered under our reciprocal agreements. Therefore, the contributions that they have already paid in any CARICOM territory of previous residence along with the contributions made here, counts towards their long term benefits (invalidity, old age, survivors’ pensions and death benefit) regardless of their final residence. Their short term benefits are handled in their place of current residence.
For Social Security, therefore, CARICOM is a single space and there are no foreigners. Therefore, the workers should continue to make their contributions. We have no reciprocal arrangement with the Dominican Republic, nor Cuba nor Haiti, so their nationals will only be subject to the benefit of contributions that are made here.
The main questions raised by construction workers, related to benefits, are related to fatherhood, sickness, employment injury and old age pension. If and when you father a child, the mother of the child, if she is your wife and unemployed (my apologies, does not work outside the home), she would qualify for a maternity grant of $450.00 per child born per pregnancy. If you require further coverage, and if you insist on remaining unmarried, then have her register as a self-employed homemaker and give her some money to pay something into Social Security. She may be able to pay at the special rate and therefore qualify for all kinds of benefits (see my article entitled Vendors Allowed). If you love her as much as you say you do, then show her how much!
Employment injury is straightforward – you must be at work. Even if the injury occurs on the first day of work, you will be covered.
What happens when the worker goes “home” on vacation and gets sick? How come he can’t get sickness payment when he gets sick early in the year? For sickness benefit, the worker must be in employment immediately before the illness occurred and must have paid at least 26 continuous contributions, and 8 of the last 13 weeks must be fully paid up. Each week of work, or part of the week, constitutes a contribution. To explain this, we need to examine how the industry conducts itself.
The practice of shutting down construction activity in mid-December until mid-January is bad for the industry, even though at this time holiday pay and sometimes a bonus is paid to the worker. However, no contribution is made to Social Security from these payments. In other words, the worker has broken the policy with Social Security and becomes temporarily ineligible for sickness benefits until he satisfies the criteria once again. When I go on vacation, my salary is paid as though I am at work and contributions are reported to Social Security. I get paid vacation. When the construction worker goes on vacation, he gets holiday pay –in advance – and all of it one time. This is usually paid in December and becomes exempt from Contributions. He has become temporarily unemployed. He may return to the same job, he may not. He may be called back by the boss, he may not. In effect, he is reported on to Social Security 48 times per year instead of 52 times. What should happen is that both he and his boss should report his absence as paid vacation for the period that he is away and pay contributions to keep his policy alive. Take the bonus – if available – as a lumpsum but keep options open on the holiday pay.
When construction workers break the policy in December/January, it means that they can hardly qualify for sickness benefits during the first 3 months of each year; a time when about 25% of all sickness claims are generated. This is the second sickest period of the year!
There is another important aspect to consider. Ten years of work, in my type of employment gives me 520 contributions and qualifies me for a 30% pension. Ten years of construction work – as it is currently practiced – yields 480 contributions and does not qualify the worker for a pension, just for a grant. Twenty years of work would get me 45% of the average of my best 3 years wages of my last 15 years of work as pension; it will get the construction worker 40%. For the same $2,000.00 per month salary, same number of years in the system, my pension would be $900.00 per month, the construction man’s pension will be $800.00 per month. You really cannot eat your cake and still have it!
There are two other possible solutions to this quandary. One is for the worker to pay as a self-employed person during the break. This requires the worker to pay the entire 10% of the band for construction work. Alternately, and once 104 contributions have already been paid by him or on his behalf, then he can pay voluntary contributions in order to keep his coverage. Voluntary contributions are paid at the rate of 5% of the usual wages, but may only qualify the payee towards pension type benefits. Nonetheless, they may be worth exploring and we would be pleased to engage the construction industry in further discussions on these matters.
The Construction industry has produced some magnificent edifices in this country. Such buildings belie an industry that is tough on its practitioners in many ways. There is no need to make it brutal. Men, protect yourselves. Keep this article and spread the word. Wives, girlfriends, concubines, daughters, mothers -save us from ourselves. Construction workers are losing now and losing later!