Dear Moses, our NSSF company contribution stopped without notice. When the company said it was cutting pay, it didn’t say NSSF and pension would be affected. I know we are in tough Covid times, but isn’t illegal for companies to stop NSSF contributions without notifying their employees? Also, if one left the company, would they claim these unremitted funds? Lisa
NSSF Contributions are mandatory and must be collected and remitted by the employer to NSSF without fail every month. The employee contributes 5 per centwhich the employer tops up by 10 per cent before remitting to 15 per cent of the employees’ gross salary to NSSF.
Employers that fail to register their employees with the Fund or fail to remit deducted money are liable for heavy fines upon clearance of arrears. The NSSF Act prescribes a penalty of 10% per month of the amount in default plus outstanding interest.
However, you didn’t clarify if your employer had requested for NSSF amnesty that the Fund provided for employers struggling with the COVID-19 business disruptions.
NSSF after the outbreak of COVID-19 pandemic, introduced an amnesty to employers. This was a measure by the Fund to support businesses or Employers facing economic distress as result of the COVID-19 pandemic and subsequent lockdown.
This measure involved allowing Employers to reschedule their NSSF contributions for the (3) three months without accumulating a penalty.
The rationality for granting the Amnesty was in response to support of the Government of Uganda’s interventions to combat the effects of COVID-19 pandemic on businesses in the private sector, by assisting distressed businesses to overcome the challenges of covid-19 and stay in business.
The amnesty was also intended to give reprieve to some employers who were grappling with inadequate cash flows, stemming from limited consumer demand and disruptions in supply value chains.
The contributions for the affected months are meant to remain outstanding and payable by the employers although without penalty and through a convenient payment plan agreed by the employer and NSSF. You are therefore advised to verify this before reporting your employer to NSSF.
Head of Human Resource,