Companies reluctant to provide details to Social Security Fund

- PRITHVI MAN SHRESTHA, Kathmandu

May 4, 2014-

The Social Security Fund has been having a hard time compiling a database of private sector employees due to non-cooperation by the companies. The fund has been collecting information about workers in private companies as part of its plan to provide them social security benefits in the future based on their contribution.

Fund officials said that only around 200 companies had sent a list of their employees even though it has been two years since it sent them a request. An estimated 80,000 companies out of the 100,000 registered with the Office of the Company Registrar are in operation. “We had sent letters to major individual companies and business bodies including various district chambers,” said Kewal Bhandari, executive director of the fund. “However, we have not received the details despite repeated follow-ups.”

He added that the fund had also been issuing appeals through the media asking employers to provide details of employees, but the response has been poor indicating non-cooperation. A few banks and some production-related companies have submitted the details of their employees, according to the fund. However, Federation of Nepalese Chambers of Commerce and Industry (FNCCI) President Pradeep Jung Pandey said it may have been a long time since the fund made such a request. “If requested, we are ready to help make the data available within a few weeks,” he said.

Lack of a Social Security Act and new Labour Act has been the main stumbling block to implementing the government’s social security plan. Bhandari said that even after the act is introduced, it will still take a long time to implement the plan due to delays in submitting the details of the employees.  

The Social Security Act will deal with the social security packages to be provided to the employees while the Labour Act will determine their and their employers’ contributions. The proposed Labour Act has mentioned that employees have to contribute 10 percent of their salary while employers have to contribute matching funds.

The fund has also prepared social security schemes for workplace accidents, reproductive health and health insurance for industrial workers. The social security regulation includes nine types of schemes, and the proposed act is expected to incorporate them. “Although the former government led by Khil Raj Regmi tried to introduce the Social Security Act through an ordinance, traders opposed the idea and so it could not be introduced,” said Bhandari.

For their part, entrepreneurs said that social security and labour flexibility should go hand-in-hand. Employers have long been demanding that the provision of hire and fire should be included in the labour law, an idea which trade unions oppose.  

However, Pandey said FNCCI was very much supportive to the idea of introduction of a social security plan as it would help smoothen employer-employee relations. “We are more concerned about the ease of exiting a business than the hire-and-fire facility,” he added.

Even if the Social Security Act is introduced, the absence of a new Labour Act, which will say who should contribute how much, will make it hard to implement the social security scheme.

Published: 05-05-2014 09:51

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