Ethical Security choices: Avoid Exploitation and ensure compliance.
Our previous write-up explained the risks of using non-compliant security companies and why working with companies that don’t uphold PSIRA (Private Security Regulatory Authority) regulations is ill-advised. To recap – consequences include massive fines and possible criminal charges but, regardless, a devastating blow to your company’s reputation. However, we did not mention how irregular security companies evade the law or delve into the social and financial impact on employees or the bona fide competing security companies. Let’s unpack this scenario and consider the following points when a security company is dramatically cheaper than others.
All PSIRA regulation violations involve exploiting employees within non-compliant companies, which can happen in several ways. It’s important to note that labour costs constitute at least 70 to 80 per cent of the overall cost proposed to you.
A favourite tactic is that non-complying companies fail to pay the employee’s provident fund contribution to PSSPF (Private Security Sector Provident Fund), which equates to 13% of the officer’s basic wages. In extreme cases, this failure occurs despite the salary deduction of 6.5% from the wage of the security officer. Add these costs together, and the company can tender the labour up to 13% cheaper than a legitimate company. Neglecting to follow the legislation in this stunt can devastate employees who believe they are regularly saving money for their retirement, only to find out they have accumulated no nest egg when they try to claim their provident fund. Likewise, the legislated hospital cover contribution of approximately 3% of the payroll cost could be dodged, leaving security officers high and dry when medical treatment is required.
Equally importantly, these companies may not pay double time for public holidays. This tactic equals a monthly cost reduction of one complete shift per month, equating to a labour cost reduction of 3.41% “.
A crooked company may neglect to pay the prescribed time and a half for Sunday work. They do this using staff that agree to inferior terms and conditions, even though it contravenes the law. I think it’s sad that the level of desperation for a salary (albeit substandard) perpetuates this scenario. The company “scores” 7,14% of the cost on their labour bill that a complying company would include.
Furthermore, some rogue security companies ignore legislation compelling employers to pay a 13th cheque to workers, thereby reducing the labour cost mode a further 9%.
Another critical factor is that some companies register their business as something other than a private security service provider to reduce the workman’s compensation fees (COIDA), which is legislated at almost 3 %. This misrepresentation dramatically reduces their contribution to the fund, making their tender up to 2.5 % more competitive than a complying company. It can be shattering to the employee should an accident at work occur.
In addition, the most horrendous security firms illegally manipulate the enacted shift system (dodging overtime); some simply don’t pay the correct wage rate or don’t pay staff when they are sick or a family member dies, the latter two equating to another skim of 8.17% off the wage bill.
So please, when choosing a security firm, consider the far-reaching consequences of your choice on the people you expect to secure your business, factory, or home. If this isn’t enough to deter you, realise that the cheapest quote – evidentially those proposing up to 50% less of a credible company’s labour cost (depending on how many tactics they employ) – may have far-reaching implications for your business legally – remember that directors can be held jointly and severally liable for sub-contractors misconduct under the Securities Act.
To verify if the quote you recieved is PSIRA compliant please visit:
OR If you would perfer a quote from a trusted, PSIRA compliant business please get in touch with us here
From the desk of Bronwyn Tyler
