A Look Back on 2022
National Pension Scheme (Occupational Pensions) Amendment and Validation Act 2022
In force from 29 March 2022, the National Pension Scheme (Occupational Pensions) Amendment and Validation Act 2022 amends the National Pension Scheme (Occupational Pensions) Act 1998 to provide a further one-time lump sum withdrawal of up to $6,000 by a member or former member of a defined contribution pension plan, or a local retirement product, who has not attained the normal retirement age. Although this change does not impact employers directly, HR professionals and business owners will want to be aware of this change should an employee make enquiries regarding early draw down from their scheme.
Payroll Tax Amendment and Validation (No.2) Act 2022
On 20 October 2022, the Payroll Tax Amendment and Validation (No.2) Act 2002 came into force. The main amendments include clarification around what constitutes actual renumeration and the widening of exclusions to renumeration more than any substantive or significant changes. Points to note include that “gratuity” for the purposes of exclusions to renumeration has been clarified to mean “any gratuity for services rendered, whether paid by a customer directly or paid by an employer or self-employed person from a fund entirely constituted of gratuities paid by customers for services rendered”. Given that these changes are already in force, those managing payroll will want to make sure that gratuity, under this new definition, is not included for the purposes of payroll tax.
What to Expect in 2023
Employment (Minimum Hourly Wage Entitlement) Act 2022 (Bill)
On 1 June 2023, the Employment (Minimum Hourly Wage Entitlement) Act 2022 (Bill), which was tabled on 18 November 2022, is set due to be introduced. The effect? Bermuda will have one of the highest minimum wages in the world at $16.40. The new legislation would give employees the right of entitlement to minimum wage. From early summer next year, employers may need to review the terms of employee pay to ensure compliance. This move is perhaps necessary to ensure that the standard of living is kept in line with inflation and will certainly go to benefit employees.
Amendments to the Contributory Pensions Act 1970
The Speech from the Throne 2022 revealed that there was intention for the Government to introduce amendments to the Contributory Pensions Act 1970 “to make provision for a sliding scale in contributions, based on salary earned and not a uniform contribution irrespective of income”. No bills have been proposed and the exact amendments which are sought are not detailed. Whilst this could be positive for both employers and employees where incomes are modest such changes may not be so welcome for those providing, and receiving, higher incomes. It is likely that in 2023 we will know what shape the proposal will take, however there is little to indicate that any amendments will come into force within the next 12 months.
Implementation of the Personal Information Protection (PIPA) Act 2016
The Speech from the Throne 2022 also set out that the Personal Information Protection (PIPA) Act 2016 would finally be implemented, albeit in a phased way. PIPA provides citizens with informational privacy and sets out what organisations and businesses must do in respect of the utilisation and sharing of personal information. Whilst PIPA was given Royal Assent in 2016, it still has not been implemented. The primary reason for this being that the Government was providing organisations with the opportunity to ready themselves. No date for when we might expect PIPA to finally be phased out was provided in the Speech and the Government has not made any further announcements, however, the suggestion is that this is something to look out for during the course of 2023. All businesses will be affected, and employers will need to ensure that they are complying with each phase of PIPA in respect of their employee’s personal information.