For the second year in a row, Auditor General Larry Dennis named and shamed companies that had failed to pay payroll tax and had failed to pass on employees' pension contributions.

He has also laid out the problems that are caused by employers who fail to meet their obligations and some solutions to the problem.

Mr. Dennis noted that pension arrears are effectively theft because the money collected belongs to the employee who may find himself in trouble at retirement because his or her pension money is not there.

"When for, whatever reason, employers fail to remit the pension contributions they have collected from their employees, they betray their employees' trust and cheat them of the pensions for which they have paid," he rightly said.

"Employers who are slow to remit their pension contributions are in effect borrowing at no cost," he added "For some of the reasons listed above, this practice is reprehensible and probably criminal. It also gives unscrupulous employers an unfair competitive advantage over their competitors who lawfully remit their contributions and taxes on time."

And he also noted: "Some businesses may even be tempted to declare bankruptcy and then start a new business to rid themselves of pension and payroll tax liabilities."

The latter problem is in many ways the most serious. About half of the companies that Mr. Dennis named and shamed in his report (they were republished in Saturday's Royal Gazette) are either bankrupt or in receivership.

That means that the employees are unlikely ever to see their pension money again.

And in some cases, employers have then begun business again under another name, having abandoned their obligations forever. This cannot be acceptable. Dishonest employers are clearly a large part of the problem.

And Government has become more zealous about taking employers who refuse to meet their tax and pension obligations to court.

But the penalties that can be administered by magistrates when employers are brought before them are woefully inadequate.

Last year, two companies that owed $250,000 between them were brought to court but were only fined $250 each. Not only is that no deterrent, it is an actual incentive to employers to fail to pay their taxes.

Government must address this deficiency in the law as a matter of urgency and should give the courts the right to imprison employers who flout the law and steal from the Government and their own staff.

At the same time, Government needs to become more aggressive in collecting these taxes because if it is left too long, the employer is gone, leaving a bankrupt shell behind it.

Mr. Dennis said in his report: "Deficient accounting systems, ineffective collection methods and, as I noted in my previous report, the lack of political will to address this issue, have allowed these arrears to accumulate. It is an embarrassment."

Mr. Dennis is right. Employers who break the law need to be caught and punished. They are a national embarrassment.