Singapore— The Central Provident Fund (CPF) Board has successfully retrieved nearly S$ 2.7 billion in the last five years in unpaid contributions from employers for the purpose of giving this money back to workers.
A report from The Straits Times (ST) said that in 2018, the amount of unpaid CPF contributions from such employers was S$595.9 million. In 2014, it was at S$378.2 million, which may mean the situation is not improving.
The biggest victims of these employers who have not paid CPF contributions are lower-income casual employees.
The CPF board found out about these situations due to employees’ complaints as well as through conducting audits.
Every employee in the country, which includes casual workers, falls under different labour laws, like the Employment Act and CPF Act. Each employee is also entitled to CPF payments. Employers must issue pay-slips which are itemised and specifically state the amount of contribution by employers.
If an employee’s wages are higher than S$50 a month, employers need to pay their CPF contributions. Employees who earn over S$500 per month should also start making their CPF contributions as well.
Given that more and more people are casually employed in the rising ‘gig economy’ this non-payment of CPF is a grave issue.
From a total of 1.85 million resident employees, the number of casual employees in Singapore in 2018 is 3.4—a significant increase from just three percent three years ago, in 2016.
Many casual workers are employed in the food and beverage (F&B) industry and security, among others.
ST quotes labour MP Zainal Sapari as saying, “It’s quite common in the F&B sector, where they are paid cash without any CPF. They are usually local, low-income workers.”
The trend of non-CPF payment is common when people employ their relatives to work in their stalls, a practice that is not unusual, which takes the place of the more traditional employer-employee relationships.
Mr Zainal continued, “By right, this should be a relationship between employer and employee, because you specify the hours of duty, type of duties and provide equipment for the duties.
The casual workers, in this case, are short-changed because they are not paid CPF.”
There are workers in the security industry who choose to receive a salary weekly without CPF instead of a monthly salary that includes CPF. Many of these workers are unaware of their right to receive CPF payments and are satisfied with daily or weekly wages because if they don’t get paid, they can simply refuse to work for the firm.
But some employers themselves realise that they’ve made mistakes in not paying their employees’ CPF, and have notified the board of this when they realise their mistakes.
The labour minister said that when employees do not receive their CPF, they no longer qualify for Workfare Income Supplement (WIS) scheme subsidies, which allows them to receive additional funds for supplementary income, as well as CPF top-ups for their retirement.
Mr Zainal said, “(WIS) payouts are now given every month, so they must get their employers to make CPF contributions.”
There are fines meted out amounting to as much as S$5,000 as well as a 6-month jail term for employers who do not follow the CPF Act. And, should employers deduct CPF contributions from employees but fail to hand these to the CPF board they can be fined up to S$10,000 and go to jail for as long as seven years. -/TISG