Remove tax, NIS from overtime
The time has come to change regulations governing overtime payments in Barbados.
Local businessman Norman Edwards is advising authorities to allow workers on the job after 40 hours to work for the additional money free of tax and national obligations insurance since the status quo was a financial and operational burden for companies and their employees.
The managing director of L&N Workshop Inc. made the recommendation in an interview with BARBADOS BUSINESS AUTHORITY and said he welcomed feedback on solutions to the often vexing issue. Edwards said that working beyond the standard 40 hours was not beneficial to workers and it was hurting productivity.
“You can’t blame [workers] for not wanting to work overtime – it is not beneficial to them. It honestly is not because that overtime money is taxed and national insurance comes out of it. There is nothing in it for the worker”, he said.
Edwards, whose 13-year-old company is based in Cane Garden, St Thomas, further noted that what happened in some cases was those employees who were loyal to the company repeatedly put in the time to finish the tasks.
He said 99 per cent of his 50 employees worked overtime if necessary.
“If you have to go over time you can’t charge the client for having to do that to finish the project. You’re still within your rate, so when the company does overtime but it is not in the best interest of the company.
If you want the young people [workers] to start feeling productive, you have to give them something to strive for. Opportunities have to be made for them, you just can’t have them paying taxes all the time as though that’s the only thing in life.
“The Social Partnership needs to address this issue which is also a problem for companies which have to pay 11.2 per cent of the National Insurance contributions.
“This is a serious issue. Do you know what it is for a company which has a big contract with a client overseas, or even locally, [and] sometimes has to negotiate with the client to get the job [and] to deliver the product on time so you wouldn’t have problems with the client, you have to work overtime?
“Sometimes a machine might break down and you have to pick up the slack. That becomes a big burden for the company.
“My solution is that after 40 hours you can allow the worker to work for that money tax free and national insurance free so there would a sense of them wanting to do it,” Edwards asserted. (Green Bananas Media.)