The Cayman Islands government is seeking changes that would require local companies to have all outstanding pension, healthcare and other labor-related issues resolved before renewing their trade and business licenses.

The requirement for up-to-date pension and healthcare payments for employees exists within the current licensing law but contains the caveat that a company is not compliant only if it is “not taking the necessary actions to resolve such non-compliance.” In other words, actions to resolve non-payment of pensions or healthcare premiums can be in progress rather than already done.

An amended Trade and Business Licensing Bill made public this week will attempt to change the current legal language to state “the [license] applicant has not taken the necessary steps to resolve the non-compliance.”

The requirement will not be in place for new businesses that are applying for their first trade and business license and are therefore not carrying on business at the time their application is submitted.

The Legislative Assembly is due to meet in mid-March to resolve the legislation.

Business non-payment of pensions, in particular, but also of healthcare premiums has plagued the Cayman Islands almost since legislation requiring those benefits for private sector employees were put into place.

The former Complaints Commissioner’s Office reported in 2014 that more than 1,000 local companies were at some stage of delinquency in paying their workers’ pensions. Cayman Islands law requires private sector workers to pay 5 percent of their annual salaries – up to a maximum salary of $87,000 per year – toward their retirement funds. Employers must also contribute a matching 5 percent.

By all accounts, the process for enforcing non-payment of pensions is slow and largely seeks to gain compliance from the employer, rather than punishing them for delinquencies.

In one delinquency case that came before the court last week, Summary Court Magistrate Angelyn Hernandez said the reality was that people had been waiting 10 years for their money. The matter referenced was repeatedly adjourned and, she said, it continued as a situation in which, “Maybe they [the employers/defendants] will pay and maybe they won’t pay, it’s making a mockery of the system.”

Non-payment of healthcare premiums is less widespread. Health Insurance Commissioner Mervyn Conolly said in 2016 that more than 90 percent of the islands’ residents had healthcare coverage in some form. However, there are some residents who do not have coverage, which pushes them back onto the public sector “safety net” if they have no other options.

The situation has not improved Cayman’s overall outlook for healthcare liability. The government estimates, as of 2017, there is a 20-year present value liability of $1.7 billion for healthcare premiums just for retired civil servants, their dependents and uninsured individuals.

Other changes

The government seeks to make additional changes to the Trade and Business Licensing Law that would exempt Caymanians from some of its current requirements.

For instance, a current copy of a utility bill would no longer be required of a Caymanian applicant for licensing, if the amendment bill passes. Also, police clearance certificates for Caymanian applicants would only be required in the licensing application process for a “license in a sector for which the board determines that a police clearance certificate is required.”

Those business sectors that might require a police clearance are not stated in the amendment bill. To make things easier, business license applicants can permit the Trade and Licensing Board to receive information directly from the agency on behalf of the applicant. So if someone needs to apply for a police clearance, they can allow the board to receive that information directly from the police.

1 COMMENT

  1. So long as this also applies to the Gov itself who has owed its own staff’s pension plan near $200m for the past two decades.

    Do as I say but not as I do apparently.

  2. Government has always led the way in paying out hundreds of millions of dollars for it’s employee medical and pension plans, however unlike the private sector they do it with taxpayers money so it’s a painless process for them.