SINGAPORE — Some S$293 million in Central Provident Fund (CPF) arrears — owed to more than 200,000 workers — were recovered by the CPF Board last year, prompting Acting Manpower Minister Tan Chuan-Jin to announce that the authorities were reviewing the penalties against errant employers.

“The sum is indeed not small, and is a cause of concern ... CPF savings are important to all Singaporeans, especially for vulnerable groups of low-wage workers who rely on it to fund their retirement, healthcare and housing needs,” he wrote on his blog, after the CPF Board issued a press release on the arrears, which also named and shamed the errant companies.

Mr Tan said that raising the penalties would “hopefully serve as a stronger deterrence for employers” and help to ensure that “no worker is deprived of what is rightfully his or hers”.

Of the total sum recovered last year, S$9.4 million was from 4,000 companies which underpaid or did not pay CPF to more than 11,000 employees. The remaining amount was recovered, on behalf of 190,000 workers, from an average of 3,100 employers which were paying CPF contributions late each month.

In response to TODAY’s queries, a CPF Board spokesperson said that investigations were ongoing for some cases “which have yet to be closed” .

“However, our estimate is that the (remaining) amount is small compared to the closed cases,” she said.

A part-time waitress at the cafeteria of a healthcare company lodged a complaint against her employers on Nov 12 through a hotline. “It is important that workers, especially those with low wages, get their rightful CPF as it enables them to get Workfare,” she said. About S$82,000 of CPF contributions owed to the company’s 27 employees from January 2008 to February this year were recovered. Some part-time workers would also be receiving Workfare of up to S$700 for their work done in the first three months of this year.

Mr Tan said inspections were being stepped up “ten-fold”: Previously, an average of 500 inspections were carried out each year. In the last four months alone, 800 inspections were conducted. It is an offence under the CPF Act for employers to default on CPF contributions. First-time offenders may be fined S$2,500 for each offence. Repeat offenders may be fined S$10,000 for each offence. Last year, there were, in total, 39 convictions for non-payment and underpayment of CPF and 180 convictions for late payment.

For instance, Nuovi Cosmetics was fined S$16,200 in February last year for nine counts of late payment. First Street Cafe was fined S$9,000 in June for three counts of non-payment.

Contacted by TODAY, errant companies cited cash flow woes and argued that heavier penalties would be a double whammy, especially for small and medium enterprises struggling to stay afloat. A security firm owner who only gave his name as Hamid said: “The company already is having problems paying CPF ... so they’re making the burden greater for the company.” A representative for a costume company, who only gave his name as “Tom”, added: “It’s only when our clients start to have issues with our payment, then there will be a chain reaction.”

The Ministry of Manpower and the CPF Board — through a programme called “WorkRight” which began last September — have been jointly reaching out and educating workers on their employment rights and reminding employers of their obligations, Mr Tan said.

Pointing out the impact on workers’ livelihood when companies default on CPF contributions, labour Members of Parliament whom TODAY spoke to supported harsher penalties for errant companies. Nee Soon GRC MP Patrick Tay, nevertheless, stressed the need to look into the cases “to ascertain the real reasons behind it — whether is it sheer ignorance, neglect or ... some accounting errors, et cetera”.

Reiterating the “strong repercussions” faced by families whose finances are already tight, Ang Mo Kio GRC MP Ang Hin Kee suggested that workers receive a prompt alert when their employers do not pay CPF on time, while fellow MP Seng Han Thong proposed making it easier for workers to check and report such cases via the Internet, for instance.