Employers stealing from employees

  • Two-way relationships: employers and employees have obligations to each other

    Two-way relationships: employers and employees have obligations to each other


Our Bermuda forebears and the futuristic-minded leaders of today enacted employment legislation to define employee positions, rights, and future security that far surpass much larger countries.

The employer-employee relationship is a serious two-way street. Each individual is co-dependent upon the other in a bond of trust in order to succeed personally, and corporately. If either person undermines the business relationship, neither will benefit financially, in the long run.

In an ideal world, employers should treat all employees — from the lowest position to the highest — with respect, personally, and financially and with position-appropriate employee benefits. In return, that mutual respect accompanies the right to ask for commitment, loyalty to the firm and good work ethics.

A company CEO can present a successful commercial image, but that only goes so far. Most importantly, the firm has to deliver on the implied promises.

Responsible, committed employees operating in the global marketplace are absolutely critical to any business success. From the janitor, receptionist, IT, sales and service, and executives, every employee represents the public face of a company; without them, a company head becomes a CEO in name only.

However, today’s working world is not always ideal.

So, it was greatly discouraging to read last week of another company owner stealing their employees’ wages, as well as probable benefits, health insurance, and pensions. Actually, the news was appalling. This is theft, plain and simple.

In our current economic environment with numerous families struggling with rising cost-of-living expenses, how could an owner betray those who have committed to the company? Those who have lost their entire compensation are the most financially vulnerable among us. Where is the decency, the respect for those who have made you — the owners — successful?

Imagine being an employee with a family in a medical emergency heading to hospital, only to be informed that there is no employer-provided insurance.

Further, how can any consumer want to conduct business with such an unethical company? Nor, can anyone expect a normally good employee to generate positive vibes when the employee is working for nothing!

And it is happening more frequently. Have we have become indifferent in Bermuda — taking the attitude that “it’s got nothin’ to do with me”? Until it does happen to us.

Time is of the essence. Employees should verify their payroll deductions and employer contributions every single pay-period. The longer one waits to report a problem, the lower the chance to recover lost earnings and benefits.

Resources and links to the various deduction and contributions agencies are listed below.

I recommend that those who have been denied their entire paycheque call the Bermuda Tax Commissioner’s office immediately on 297-7754, because if you have no wages, Bermuda Government is not getting its payroll tax either.

Now, the Government has a severe legal duty and the ultimate court powers here to protect those financially vulnerable employees in our society, whether Bermuda islanders or guest workers. Keep in mind that the courts move slowly to implement justice, so quick action on the part of the employees who have been wronged is very important.

This legal duty is enforced under the Bermuda Companies Act 1981, Part XIII, Sections 195 to 198 where the Government (and its courts) has the power to:

• Order public inspection of the company books and records

• Summon person suspected of appropriating company property to personal ownership and the like, refusal of said summons leads to

• Power to arrest absconding individual

• States that the powers of the court are cumulative

The million-dollar question is: will those government powers take action to collect these benefit debts owed using all available means (garnishing company and personal owner bank accounts, attaching, repossessing company and personal property) before once again the company simply winds up, moves along, and reopens under a new name, free of any of those pesky employee obligations?

We shall see.

Readers, keep me posted.

Sources and references

Reporting missed employee obligations

Health insurance: Bermuda Health Council, 292-6420, BHEC website page on non-compliant employers’ list, http://www.bhec.bm/non-compliant/ and BHEC e-mail address, healthcouncil@bhec.bm

Pensions

Bermuda Contributory Pension Fund: 295-5151, or send an e-mail: www.gov.bm/contact/1641/196 through the Government website.

Complaint form if you observe any violations of pension protocol, www.gov.bm/bermuda-pension

Bermuda National Pension Scheme: call your pension provider and report the missing fund to the Pension Commission, info@pensioncommission.bm, 295-8672.

Companies Act 1981

Part XIII — Winding up

237. Preferential payments

1. In a winding up there shall be paid in priority to all other debts —

a. all taxes owing to the Government and rates owing to a municipality at the relevant date; b. all wages or salary, whether or not earned wholly or in part by way of commission or whether payable for time or piece work of any employee of the company in respect of services rendered to the company during four months next before the relevant date;

c. all accrued holiday pay;

d. all contributions payable during the 12 months next before the relevant date by the company as the employer of any persons under the Contributory Pensions Act 1970 or any contract of insurance (other pensions);

e. all Workers’ Compensation claims;

Further, all debts to be paid in full. If assets of company are insufficient, employee benefits have priority over other creditors, and property shall be used to meet said liabilities.

237. Fraudulent preference

a. Any conveyance, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company within six months before the commencement of its winding up which, had it been made or done by, or against an individual within six months before the presentation of a bankruptcy petition on which he is adjudged bankrupt, would be deemed in his bankruptcy a fraudulent preference, shall in the event of the company being wound up be deemed a fraudulent preference of its creditors and be invalid accordingly.

b. Any conveyance or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void to all intents.

Martha Harris Myron CPA CFP JSM: Masters of Law — international tax and financial services. Dual citizen: Bermudian/US. Pondstraddler Life, financial perspectives for Bermuda islanders and their globally mobile connections on the Great Atlantic Pond. Contact: martha.myron@gmail.com

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Published Aug 24, 2019 at 8:00 am (Updated Aug 23, 2019 at 9:28 pm)

Employers stealing from employees

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