NSITF, NECA partner to boost payment to injured workers

The Nigeria Social Insurance Trust Fund (NSITF) and Nigeria Employers Consultative Association (NECA) have signed a new memorandum of understanding on items that constitute payroll of enrollees into the Employees Compensation Scheme (ECS). The Director-General of NECA, Mr. Segun Oshinowo, said the need for a revision of payment of workers’ one percent of payroll by […]

The Nigeria Social Insurance Trust Fund (NSITF) and Nigeria Employers Consultative Association (NECA) have signed a new memorandum of understanding on items that constitute payroll of enrollees into the Employees Compensation Scheme (ECS).

The Director-General of NECA, Mr. Segun Oshinowo, said the need for a revision of payment of workers’ one percent of payroll by employers informed the setting up of a joint committee whose work culminated into an agreed term for the definition of the payroll and mode of deduction.

The NECA boss said the products of the committee’ work formed the basis for the Memorandum of Understanding that was signed by the two organizations. He further explained that the MoU clearly spells out the items that constitutes payroll with pension, special allowances exempted from the list.

While the definition of payroll may cause controversies, both NECA and NSITF decided to define payroll on the basis of exclusion and that the items that would be excluded are items that are irregular on the payroll such as bonus, overtime payments, items that employers bear the costs but do not translate into cash in the pocket of employees, which formed the basis for the exemption of pension contributions.

Oshinowo explained that indeed the new Memorandum of Understanding that was signed by NECA and NSITF last week in Lagos provided clarity of definition as far as items that constitute what a payroll is within an organization.

He added: “It is difficult to run a scheme where controversies would dogged the implementation because the stakeholders are not on the same page on the terms and references that are contained in the law. We believe that the MoU would benefit the workers that the scheme is meant for at the end of the day and as employers we have to support that. We appreciate the fact that payroll is a generic concept because the context of payroll will differ from company to company.”

The NECA boss hinted that the signed document would be sent to all employers in the country before the end of the year to enable them plan for 2017 expenditure.

The NECA chief cautioned employers against flouting the newly agreed definition of payroll in the payment of the one percent required by the ECA.

On his part, the Acting Managing Director of NSITF, Ismail Agaka, lauded NECA for playing a supportive role since the commencement of the ECA.

Speaking in Lagos at the NSITF-NECA Safe Workplace Intervention Project (SWIP) 2016 and problem solving clinic on the ECA 2010, Agaka said over 51, 000 employers had registered with the scheme and about 6,004,015 employees had been covered.

He explained that if those registered were matched with the number of employers and employees in the country, the coverage is still considered very low while a lot is required to extend the coverage.