THERE have been charges and counter-charges in segments of the private security industry regarding players who say they have upgraded the status of their guards from contractors to employees as per a Supreme Court ruling, but have continued to pay old rates, giving rise to concerns that such outfits have been robbing guards of allowances and benefits mandated by law.

In the Supreme Court decision involving the National Housing Trust (NHT) and Marksman Limited, handed down on Friday, September 23, 2022, the court ruled that effective then, third-party security guards employed to Marksman Security Limited are employees and not independent contractors and that the company should immediately begin paying over their three per cent National Housing Trust statutory contribution.

Marksman, in the wake of that ruling, said there would be an increase in the rates/fees to clients. The Government, in January this year, then announced that it would be moving to amend over 500 contracts to upgrade the status of guards — hired through security guard firms to provide services at ministries, departments and agencies — to employees by April 1. It at the time encouraged private sector firms to follow its lead in voluntarily renegotiating contracts with security guard firms.

Subsequently in May this year, then Minister of Labour Karl Samuda announced a 33 per cent minimum wage increase for industrial security guards, from $10,500 to $14,000 per 40-hour workweek. He said the single-time rate will move to $350 per hour for work done during any period not exceeding 40 hours in any week. Additionally, work done during any period in excess of 40 hours in any week will attract a time-and-a-half rate. That rate will be increased to $525 per hour.

He also said that allowances payable to security guards would also be increased. These include laundry allowance, which moved from $47.62 to $52.38 per hour. Firearm premium allowance, he said, would move from $51.95 to $57.15 per hour; and dog handlers’ premium allowance from $35.72 to $39.29 per hour. He said security guards’ life insurance coverage, with double- indemnity protection and dismemberment coverage, would be increased from $2,976,000 to $3,275,000.

But according to a highly placed industry source, while a number of guard companies have been compliant with the laws, which understandably resulted in price increases to customers, there are a number of companies who are still operating outside of the law, along with the customers who have been only too happy to benefit from the low rates that these companies have been able to offer.

“There are a number of smaller companies who are offering services in the marketplace at a significantly lower price; it would bring into question whether these companies is paying over statutory deductions and offering sick leave or vacation leave,” the source said.

It was further alleged that, “there are a number of companies who have government contracts but alleged paying a flat rate to the guard of $330 per hour, no overtime, no laundry, all of which is supposedly now part of the law”.

The industry source, who said Finance Minister Dr Nigel Clarke had, during discussions with security insiders, assured that the Government would not sit back and allow persons to flout the law and operate unhindered, said there is need for monitoring by regulators.

“Competition is fantastic once it is fair but if companies are operating outside of the law, clearly there needs to be somebody which will ensure compliance. We are not looking for favours to be put in an advantageous position; we are just looking for enforcement. We cannot compete with companies who are allowed to pay below minimum wage,” the source said, noting that if this is allowed to continue the industry might fall back into the state in which it was before the court ruling.

Head of the Jamaica Society for Industrial Security (JSIS), Lieutenant Commander George Overton, when contacted told the Jamaica Observer that the entity has no evidence of such occurrences.

“Anybody who is in that circumstance must contact us so that we can take the necessary action, along with the relevant government agency. We have no complaints, nor do we have any evidence provided by anybody. There are basically two agencies tasked with monitoring compliance, the minimum wage division of the Ministry of Labour and the Private Security Regulatory Authority (PSRA),” Overton said.

“What the Minister of Finance did say was that he would be taking steps to ensure that only compliant companies held Government contracts. Now how he has gone about that, I don’t know. He has not set out a mechanism or methodology that he is going to use,” he told the Observer.

JSIS in recent weeks has, through public service advertisements, advised guards that they should receive payslips which should show their base pay, overtime pay, allowances, and all statutory deductions. It encouraged individuals who are not receiving payslips or who have not had their status updated to employees to make a formal report to it.

Head of the PSRA, Rick Harris said there are companies that are probably slower in complying because they lack the capacity — financially and administratively, to do so within the stated time frame.

“It may be that larger companies feel this is unfair. The majority of those who are not compliant, in moving towards compliance, have demonstrated good faith by acquiring, for example, Tax Compliance Certificates, acquiring payroll systems. To my mind that is the current position — the industry is finding equilibrium within the new paradigm that exists,” Harris said.

“The industry is finding balance, but it is happening at a pace within the resources that they have. It is a minority that do not want to be compliant,” he stated.

Modern Investigations and Security Company Limited, one of the entities accused of being non-compliant, despite having a majority public sector client base, when visited by the Observer said it has been given a July 12 date by the Ministry of Labour to provide proof that it has been paying the new rates.

Managing Director Glenroy Stewart, when asked the rates being paid, said it was “in the region of $310 and $350 per hour”.

“I know persons have been to the Ministry of Labour to complain. We have been to them [workers] on the ground to explain [what the Government has mandated]. The majority of them are of the opinion that the 33 per cent is on what they have, but not recognising that when you put it on you still have to do deductions,” Stewart said.

“A number of them over the years have come to say, ‘I don’t want any money deducted from my pay, neither for NIS or NHT’ — they don’t want it to come out. Now, it is mandated that we must do it. That is where we are, I have nothing to hide. If I don’t comply with what they say, the Government will take action,” he stated.

Stewart, however, is maintaining that it has been difficult for his small outfit to come above board as several of his clientele are in the red in his books.

“The clients are saying reduce the number of guards contracted to them because they can’t afford the new rates. When the Government says maternity leave with pay, paid vacation leave, these things don’t happen overnight. Almost 90 per cent of what I have is Government. The key is the on-time payment,” he said, claiming that a number of agencies owe him.

“When the Government mandated these things [new rates] we have been having dialogue with our clients to get them to pay increased costs so we can pay the guards — even now we are still struggling with a few of them. A number of them have said they are not paying overtime, they are saying we should fill the gap with personnel who can work eight hours and go home (they are not willing to pay overtime),” he told the Observer.

“It is a work in progress. We have to put the numbers together with the agencies that employ us, get their approvals, then we start to pay what the Government insists. One of them is to make sure that all deductions come out of the individual’s pay. The agencies are reluctant even though the Government says this and then they drag out the payments, so we end up many times have to be subsidising Government. We have started paying, we have given our assurance,” Stewart told the Observer.