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Big spike in licensing fees for private-security market

Published:Wednesday | November 12, 2014 | 12:00 AM
George Overton, president of the Jamaica Society for Industrial Security.
Rosalyn Campbell, executive director of the Private Security Regulatory Authority.
John Azar, managing director of KingAlarm.-File
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Guards face 733% increase; companies to pay 220% more

Tameka Gordon, Business Reporter

A week ago, it would have cost individual security guards $200 or $300 per year for their licensing fee - at least for those who work with honest employers.

That changed dramatically on November 1 when the oversight agency, Private Security Regulatory Authority (PSRA), implemented fee increases ranging from 400 per cent to 733 per cent for guards.

Security companies will pay 220 per cent more on average.

The industry knew the fees were changing, but sector interests tell Wednesday Business that the size of the increases was unexpected - and resented.

PRSA fees were last raised 15 years ago and are being revisited now because like many other government entities in the age of economic reform, the agency is now required to be "self-funded", says executive director Rosalyn Campbell.

The PRSA has been exploring its options since 2010 and has held consultations with the sector, the last of which was in March, to prepare them for the increases.

"Everybody was aware," said Campbell, who adds that the new fees are "considerably lower" than the rates proposed at the agency's March conference.

The old rates cover just 10 per cent of the agency's cost of operations, she said. It's not clear how much of the PRSA's budget the fees now cover.

Lt Cdr George Overton, president of the umbrella body for security companies, the Jamaica Society for Industrial Security (JSIS), says though the increases may be justified, considering the role of the PSRA, the agency "has not fulfilled its mandate" to police regulatory breaches and rein in unlicensed operators, and must now up its game.

"In terms of percentage, it is a significant increase," said Overton.

"I know that there has been a little upset and clamouring over it, especially when there is going to be no improvements in the service from the PSRA."

The new fees, he said, should not only be used by the PRSA to "pay its bills" but should foster a new ethos in which the agency is more willing to tamp down on unapproved operators.

Armed security guards will now pay a licensing fee of $2,500, up 733 per cent from $300; unarmed guards will pay $1,200, up 500 per cent from $200.

Fees for security trainers and private investigators have also been increased by 400 per cent, from $1,000 to $5,000.

The licensing fees for companies now stand at $23,000 for a company that has 101 guards, up from $7,000; and $32,000 for between 101 to 500 guards, up from $10,000.

Late registration for companies now attracts a charge of $10,000, up from $3,000.

The fees are coming "from really very low levels", Campbell said, adding that they had not been increased since 1999.

But she also charged that some firms have been using the fee to bilk their employees.

"What a lot of the companies would do is pay it up front and then claim it from the guards. The unscrupulous ones among them take that amount monthly, so most of them [guards] have been repaying their companies $200 a month," she charged.

In other words, instead of paying $200 for the entire year, some guards were being charged $2,400 by dishonest employers.

Overton said companies typically opt to "upfront' the licensing fees for guards, then deduct the payment from salaries to facilitate a smooth transition into the industry for the guards, "some of whom were not working before and would not have the money to pay".

John Azar of KingAlarm said he would continue to pay the fee for security guards who are full-time employees of his company, but those who are on contract would have to foot the bill themselves as was the case for the old regime.

It's unclear whether the companies will now subsidise the fee for security guards as the management of individual firms contacted was said to be unavailable for comment.

But Azar is of the view that other companies will also be "reluctant to pay" for contracted guards.

"Simply because the licence is actually theirs (the security officers) and not the company's, meaning that if they leave the company, the licence goes with them and allows them to work elsewhere within the industry," he said.

A security guard at one of the smaller security firms, who spoke on condition of anonymity, said the company pays the fee but that their contract required them to repay the firm.

"The guards just know that the fee is in it and we just pay back the company," the guard said.

A guard at one of the larger companies said they had not been advised of the increase.

"No one has said anything to us. This is a major increase and I don't even think the armed guards know either," said the person, who also wished not to be named.

The new fee represents a substantial cost for guards, who typically earn minimum wage.

On average, the base rate pay for unarmed guard stands at $204.95 per hour with $37.30 paid for laundry, Campbell said. Armed guards get an additional $40 plus the base rate.

The security industry currently has just over 21,000 security guards with 300 companies now licensed by the PSRA.

The sector has also managed to attract a "higher quality and level of persons" due to job shortages in other fields, said Campbell.

The sector has grown steadily in the last six years, from 12,000 guards and 212 companies in 2008 "and it just keeps going up," she said.

Azar says the new PSRA charges are likely to lead charges to an increase of unregulated companies in the sector.

"The increased cost to companies based on other increases to take effect will be significant and there is a concern that the number of unregulated companies will increase as persons seek to avoid the additional expense," he said.

tameka.gordon@gleanerjm.com