Prosecuting Employers For Delinquent Payments

November 17, 2016

The Tax Commissioner, Director of Department of Social Insurance and the Director of Public Prosecutions have held a series of meetings to address the situation of delinquent employers and unpaid Payroll Tax and Social Insurance Contributions.

“The Tax Commissioner and the Director of Social Insurance will start to forward employer files to the Director of Public Prosecutions for prosecuting employers, companies and individuals, for offences related to delinquent payments pursuant to their respective legislation,” a spokesperson said.

Bermuda Tax Commissioner TC 17 Nov

Director of the Department of Social Insurance Karen Daniels stated, “In the case of Social Insurance, there is an estimated $42.8 million owed over 90 days of unpaid Social Insurance contributions that has not been paid in by employers.”

“As both employers and employees well know, social insurance contributions provide for an employee’s pension when they reach the age of 65.

“The amount of the pension is directly linked to the amount paid in over the years. It is a serious breach of the law to not pay in the social insurance contributions deducted from the employee. It is equally serious for the employer to not pay his statutory obligation.

“Employees of companies and other businesses can check with the Department of Social insurance to ensure their contributions are paid up by contacting the Department at 295-5151.”

Tax Commissioner Lucia Peniston said, “In the case of Payroll Tax, there is an estimated $47 million of unpaid Payroll Tax that has not been paid in by employers.

“Payroll Tax is used by the Government to provide essential services for Bermuda and its residents such as the Police and Fire Service, maintaining roads and other infrastructure, providing housing, education, health and other social benefits.

“We are concerned about the behavior of employers that seeks to undermine the Payroll Tax System. Offences include failing to register, failing to file quarterly tax returns, failing to maintain adequate payroll records, obstructing public officers in the execution of his duty under the Taxes Acts and finally, engaging in criminal tax evasion where there is clear intent to defraud the Government through false reporting on their tax returns.”

Ms. Daniels and Ms. Peniston urged delinquent employers to contact their respective departments so that they can bring their accounts to compliant status by arranging payment plans for the arrears where payments are made consistently and timely.

They noted that they have utilized the various government entities to recover this debt, in particular the Debt Enforcement Unit of the Attorney General’s Chambers, for the recovery of these unpaid tax arrears.

“The DEU has actioned on 90% of the accounts referred from the various departments, however there are various limitations. As such, we have decided to pursue these delinquent companies not only in the civil courts but also in the criminal arena, as both the Contributory Pensions Act and the Taxes Management Act allow,” a spokesperson said.

Director of Public Prosecutions Larry Mussenden stated, “I am concerned that employers have conducted themselves in this way and further that they have failed to fully respond to the civil court proceedings.

“It is of utmost importance that deductions from an employee must be paid to the Social Insurance Department so that an employee at the age of 65 can have the pension to which they are entitled; and it is extremely critical for Payroll Tax to be paid to the Government so that it can provide services.

“Further, it is unlawful for those employee funds to be used in any other way by the employer. Additionally, every employer must pay their own contributions to the Government. We will review files from the Departments and we will soon prosecute companies and individuals for any relevant offences seeking appropriate sentences and orders for arrears to be paid.

“However, we do encourage employers to contact the relevant Departments, make payment arrangements and make actual payments.”

The telephone number for the DOSI direct line to handle queries is 294-9242.

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Comments (22)

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  1. Nothing new, any bets that some employers are politically connected?

    • OILYYYYYYYYYYYYYYTR says:

      up I know of one..

    • Toodle-oo says:

      In case you can’t remember OJ , your boy ‘de Colonel’ back in the good old platinum days promised to go after all these delinquent people and get the money back . And what became of that ?

      Once he found out who they were he backed off and it faded off the radar for political reasons .
      Because the offenders AREN’T who you’re supposing them to be and they weren’t who de Colonel was expecting them to be either !

  2. San George says:

    Businesses need to significantly increase what they charge in order to ensure you can afford to keep civil servants working, plus their six weeks vacation and benefits. If yah barely making it, throw in the towel and get a government job – not worth the trouble.

    • Benefits are a form of reperations for 400 years working FREE.

      • Zevon says:

        Is that why they “need” 14 weeks sick keave a year?

        By the, stop the ’400 years’ sh1 t. It’s a load of bollocks.

    • Riley says:

      How right you are, no point bothering when you see the arrogance, stupidity and entitlement in which it is thrown away.

  3. Accountant says:

    This is long overdue. Employers should be taken to court and held accountble. When an employer deducts monies from a employees pay check it is their legal obligation to submit those funds to the various organisations. It is not the employers money, it is the employees, they earned it. If an employee has been hired for $1,000 per week and $150 is deducted from their pay cheque their take home pay is $850. The $150 doesn’t belong to the employer, it is the employees hard earned money that their employer must submit to Social Insurance, the Health Insurance Company, the Union or whomever on their behalf. The problem is it is too late, when the employee finds out that the funds haven’t been submitted. By then they retired and the funds are no where to be found and the employer is no longer in existence. We must do better, employees need confirmation that the funds were submitted. With today’s technology that should be easy. If is was easy for the employee to know that his or her deductions were not being submitted, then they could bring pressure on the employer too. What country in the world allows their taxes not to be paid! No payroll tax payment, suspend all work permits for that company. No payroll tax payment, no renewal of passport for all shareholders. Bet those funds would be paid. Just a thought!

    • Paradise reclaimed says:

      Further legislation is needed to assure no businesses in arrears get any government work. Very important!

  4. Truth is killin' me... says:

    BUN DEM…employers that don’t pay their proper taxes that is and that rip off Joe Public!!

  5. CBA says:

    How are you going to know if a company isn’t paying their taxes if they don’t tell you that they have certain employees?

    Tried telling this department about a company who doesn’t declare their employees so they don’t have to pay taxes but the department didn’t seem to care. They kept saying “well their account is up to date”. Yes, that’s because they aren’t telling you they have more employees that they don’t pay taxes on!

  6. Frank says:

    The question should be is why have the OBA/PLP not taken these people to court? If the person or company is insolvent so wind it up asap as employers are allowed to pocket this money. Unpaid taxes/ no work permit or company vehicle renewed until pd up to date or payment plan in place/not $50 per month payments either.These 2 departments should never be allowed to go past a certain amount of days.
    Almost 90 million over 90 days between the 2 departments.
    Get on with it and do your jobs!

  7. Sylvia Munro says:

    I hope they are going to look at the files that been on their (social insurance and auditor general’s) desks for a few years without ever being rsolved. Why do they think it will work out now.

  8. Jus' Askin' says:

    Chasing after monies owed but an airport deal allows for non of these to be paid by a specific company over years :-D

    Unemployment will Increase with this approach :-(

  9. Good luck says:

    We have known about all of this for years and years. Why does it take so long for Bermuda to act on simple law-breaking behaviour. This also includes land tax, parking fines, road traffic offences and the list goes on and on. Failure to act on simple violations creates a lawless society in which we now all partly exist. Timid governments are the destruction of law and order.

  10. UmJustSayiing says:

    We get to visit the courts faster for speeding offenses and sometimes spend a weekend in a luxury cell for non payment.
    Hmmmmmmmm!!!!

  11. JUNK YARD DOG says:

    If you lot want to have a shot at getting elected next term
    may i could recommend to you to offer some sort of re payment proposition to the tax payers and stop taking trips on my buck.

    May be you could live up to your side of the bargain
    and fix the bridges and roads and every thing else that is broke

  12. Cedar tree says:

    While I think this is a great move I just have a few questions as a small business owner. Why do I get a letter stating they will take me to court over 60 dollars yes 60 dollars and it was their system that made the error ion collecting, while large businesses are delinquent and still get Gov Contracts. another note is why are all deals for hotels and now airport exempt from taxes when little man has to pay where is our incentive? Just asking

  13. Riley says:

    Very few of these business owners want to be in this predicament – this is mostly the result of difficult times for many small businesses(anybody employing less than fifty, lets say) which are the result of – a banking system scared to lend money, a creaking very slow US recovery, increased online competition, population loss, etc. It is hard enough without government breathing down our necks and a point will come when business owners say enough.

  14. mmm says:

    I am not a mathematician.. it is suggested that the debt of close to 90 million accrued over a 90 day period, which means a million a day, or 5 million at the end of a 5 day work week. It seems that locating these employers is a problem, and futher there is a failure to put them before the Court. So if an employer owes 20,000 in payroll tax, what is a reasonable payment schedule, 3,000 and then $500 a week, he will not catch up. Government must protect those who have put into the pension plan, it is mandated that an employee must put in to the national pension plan. Why let it go so so far into arrears, that is the worse part. failing to look out for the little person. If nothing were said/revealed the debt may have risen to 200 million … and some will only pay ten cents on the dollar. We can all think of a few reasons why an employer has not paid what is due. The pensioner cannot afford to fight his employer, he just can,t. With all kinds of technology, a red flag should have gone up once an employer has missed two payments.