Employees of the Public Entity Saba will receive the maximum benefit from the 5 per cent reduction of the employer’s premium per January 1, 2019.
In reality, the amount will be slightly less than 5 per cent considering the pension premiums and some other employer’s costs that have to be taken into account. Setting an example, the Public Entity Saba is urging the private sector to also have their employees benefit the maximum amount.
The announcement of Dutch State Secretary of Social Affairs and Labor Tamara van Ark late October this year to structurally lower the employer’s premium in the Caribbean Netherlands per January 1, 2019 means good news for the employees of the Public Entity Saba since the local government has decided this 5 per cent will go the civil servants for the full 100 percent.
By reducing the employer’s premiums, companies can increase the salaries without an increase of the wage costs. According to the Ministry of Social Affairs and Labor, the room for the employer to increase the wages lies between 3.4 per cent and 4.4 per cent. The idea is that employers have their employees fully benefit from this room.
State Secretary Van Ark and the Public Entity Saba are urging the private sector to pass on the savings to the employees on the island. Saba Commissioner Bruce Zagers will invite the private sector to take part in a social dialogue which will take place shortly.
In order to fully pass on the 5 per cent to its employees, the Public Entity Saba is increasing the so-called equalization allowance (“vereveningstoelage”) that all civil servants receive which is currently 9.5 per cent. The Public Entity Saba will increase this allowance to 13 per cent. The Public Entity Saba also proposed to the Windward Islands Civil Servants Union (WICSU) to set the allowance at a minimum of US $200 per month as this would have a more positive impact for civil servants in lower salary brackets.
Commissioner of Finance Bruce Zagers said that by setting the allowance increase at a minimum of US $200, the Public Entity Saba is making sure that the ones who need it the most will benefit the most. “This increase is an improvement, but there is still more that needs to be done to improve the quality of life for our people,” said Zagers.
Per January 1, 2019, the legal minimum wage will also increase by 5 per cent, as will the old age pension AOV, the “onderstand” and the allowance for widows, widowers and orphans.