Around 6,000 private sector firms and over 90,000 workers registered before Thursday’s deadli

Chandan Kumar Mandal

The government’s ambitious social security scheme which covers formal private-sector workers has fallen abysmally below its target, primarily because of the tardiness of employers and confusion surrounding how the employee funds would be managed under the scheme.

To avail the scheme, both employers and employees had to register before the deadline. An amount equivalent to 31 percent of the workers’ basic monthly salary—11 percent deducted from their monthly salary and 20 percent employer’s contribution—will go to the Social Security Fund, as per the scheme envisioned by the government.

The deadline for registrations ended on Thursday. Since the scheme went into nationwide implementation, just over 6,000 organisations from the formal private sector had registered with the Social Security Fund (SSF)—the government body ensuring rights of social security protection—before the deadline.

The Contribution Based Social Security Scheme, which was rolled out amidst much fanfare in November last year, continued to receive a lukewarm response throughout its validity period.

The Social Security Fund had aimed to bring in at least 45,000 to 50,000 private sector firms under the scheme under which the government will provide health, accident and maternity coverage to workers employed in the formal private sector.

According to a preliminary report of the National Economic Census-2018, nearly 900,000 private firms, factories, business establishments and service providers are operating in the country. However, the Social Security Fund claims that not all of them are in operation, but are merely registered on the paper.

“We have to see this response positively as these firms have come to register voluntarily without the government taking any strict action against them,” said Rama Bhattarai, a spokesperson for the Social Security Fund.

According to Bhattarai, more than 90,000 workers involved with the private sector have been enrolled under the scheme.

“Many firms are still rushing at the office for registration on the last day,” Bhattarai told the Post. “However, the number of companies and workers registered under the scheme has stayed below our expectations.”

With the completion of registration and regular contributions, the private sector workers will be entitled to old-age pension, medical treatment, health protection, maternity coverage, accidents, and disability compensation.

Labour rights activists and government agencies have criticised employers for not being committed enough to the welfare of their workers.

Janak Chaudhary, general secretary of the General Federation of Nepalese Trade Unions (GEFONT), said that registration of over 90,000 workers in the last six months is satisfactory, although they had set a target of completing the registration of 500,000 workers across the country in a year.

“Some private firms have enrolled under the scheme, but their workers are yet to be registered. Therefore, the number of workers registered under the scheme is likely to go up soon,” said Chaudhary. “There are confusions among workers, such as whether they will get their money if they quit the job in one workplace.”

Bhattarai admitted that there had been confusion among workers about the concept of the social security scheme which resulted in their lukewarm response.

“While workers are not clear about the scheme and its long-term benefits as this is happening for the first time, employers who have not abided by provisions in the Labour Act are reluctant to register,” said Bhattarai.

Private schools have already refused to follow the Contribution Based Social Security Scheme, arguing that the programme is not feasible for small and middle-level schools.

The National Private and Boarding Schools’ Association Nepal—an umbrella organisation of nearly 3,000 private schools—released a statement on Thursday, saying that they cannot implement the contribution-based social security scheme.

The government does not have any plans of extending the deadline for employers to register under the scheme. However, it will take strict action against those who have not registered before the deadline.

“We will soon set a criteria for taking action against those private firms. We will deprive them of government facilities,” said Bhattarai.

Labour rights activists who have long been pressing for the implementation of the scheme for comprehensive welfare of workers and benefits of employers also argued that those firms not registering within the deadline should be penalised.

“Legally operating organisations are positive about the scheme as the liabilities on them have been transferred to the scheme. Likewise, new firms are also happy with this. Only those firms which have flouted government rules are worried about the new scheme,” said Chaudhary.

“The government should swing into action because they have not abided by the policy even after being informed multiple times. If they had any issues, they should have complained.”

 Published on: 18 October 2019 | The Kathmandu Post