EMPLOYEE COMPENSATION SCHEME IN NIGERIA
The Employee Compensation Act of 2010 establishes the Employee Compensation Scheme, which provides adequate and timely compensation for employees who suffer diseases or injuries in the course of employment.
The National Social Insurance Trust Fund (NSITF) provides a defined scheme through social insurance method for employees in the private and public sector. It is targeted at protecting employees or their families from financial difficulties in the event of death or permanent incapacitation as a result of work-related disease or injury. The NSITF is applicable to all employees in the public and private sector throughout Nigeria. It is also a benefit scheme which enables contributors to enjoy pension and grants far beyond their contributions.
The private sector makes contributions for their staff to the funds by virtue of a scheme known as called employee compensation scheme. The employer rate of contribution is 1% of the total payroll, consisting of the total emoluments.
Steps for NSITF employee Registration
- The first step for the registration is to obtain an NSITF ECS RE01 Form from the NSITF office nearer to the location where the applicant’s office is located.
- The form contains the following information, which must be filled by the applicant: The particulars of Business for public and private companies; The particulars of owners of the organization for sole proprietorship and partnerships; The particulars of the business sector categories.
- Upon the completion of the form, it is taken back to the NSITF within the applicant’s company location.
- A Form ECS RE03 (Employer Schedule of Payment) is issued to the applicant for completion.
- The applicant will make requisite payment as may be accessed by NSITF, based on the number and remuneration of the company’s staff.
- The applicant will proceed with the payment receipt to NSITF within the company’s location.
- NSITF will issue a receipt for such payment
- Finally, a Certificate of Registration will be issued as evidence of due registration with the scheme.
Upon the completion of the processes, the applicant is further required to apply for the Certificate of Compliance.
In conclusion, it is important that every company register its employees for the National Social Insurance Trust Fund (NSITF) to affirm its compliance with the Employee Compensation Act 2010 and to also contribute to the employee’s compensation scheme.
The importance of registration cannot be overemphasized as Employee compensation provides a form of social security for workers who become incapacitated in the course of employment or their dependents in the event of death.
By: RESOLUTION LAW FIRM