by Linda Straker
- More than 4,000 persons have already benefited from payroll support
- Some businesses submitted inflated salaries for employees but remitted to them a smaller amount
- In one instance, more than 100 employees at a single establishment affected by discrepancies
Government said it has uncovered a massive defrauding scheme by businesses whose workers are listed to benefit from the payroll support component of the Covid-19 stimulus package. The discrepancies are causing delays in processing applications and payment.
Several irregularities have been discovered by the Covid-19 Economic Support Secretariat in processing and validating applications submitted by businesses for payroll support. “The discrepancies have resulted in delays in the processing of applications as this led to the addition of another layer of validation to the verification process” said a news release issued by the Press Secretary in the Office of the Prime Minister. “Among the anomalies identified are the inclusion of service charge as part of payroll support claim; submitted data not matching records at the National Insurance Scheme and misrepresentation of the salaries of senior and management level staff to make them eligible for stimulus payments, despite being expressly excluded from the benefit.” The release did not name any specific business within the hospitality sector.
Sharing more details of the defrauding scheme, the release said that some businesses have also submitted inflated salaries for employees but have actually remitted a smaller amount to them. “Employees have also reported to the secretariat that some employers have paid them less than the 40% of salary provided for in the stimulus package for disbursement to approved applicants.”
The validation process has also confirmed that some entities have not paid the National Insurance Scheme (NIS) for their employees since 2019, although employee records show deductions being made from their salaries.
“This caused further delays in verification of employee information provided by employers. Employers are reminded that misuse of any funds paid in the stimulus package meant to be for the benefit of employees, warrants forthwith repayment to the government, if the funds are not used for the intended purpose,” the release advised.
The Office of the Prime Minister said that the violations are causing much concern for the secretariat as it appears to be quite pervasive, with numerous businesses attempting to defraud the system. “In one instance, more than 100 employees at a single establishment were affected by discrepancies uncovered during the processing and validation of applications,” the release stated.
The strongly-worded release said that the Covid-19 Economic Support Secretariat and by extension, the Ministry of Finance, is calling on employers to desist from the unlawful practice. “It is not only unfair to employees who are already hard hit by the impact of the pandemic, but it also creates an unnecessary burden for the Covid-19 Economic Support Secretariat to create additional layers of verification, a factor which subsequently causes delays in processing.”
The stimulus package was announced in March when the country went into lockdown after government declared a state of emergency as part of measures to contain the spread of Covid-19. The Parliament approved EC$50 million for use in the package, but EC$20 million was assigned for payroll support for workers in the hospitality and other sectors directly affected by the lockdown.
The workers are to receive 40% of payroll support. In a national address on 28 June, the Prime Minister said that more than 4,000 persons have already benefited from the payroll support of the package.