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Employers who break CPF rules may face heavier fines, jail term

SINGAPORE — Employers who do not pay, underpay or are late in contributing to their workers’ Central Provident Fund (CPF) accounts could face stiffer penalties, including being jailed, under proposed amendments to the CPF Act tabled in Parliament yesterday.

SINGAPORE — Employers who do not pay, underpay or are late in contributing to their workers’ Central Provident Fund (CPF) accounts could face stiffer penalties, including being jailed, under proposed amendments to the CPF Act tabled in Parliament yesterday.

Instead of the current S$2,500 maximum fine for a first offender, the Ministry of Manpower (MOM) has proposed imprisonment of up to six months, as well as doubling the maximum fine to S$5,000. Fines will also start from S$1,000, if the Bill is passed.

For repeat offenders, jail terms could be up to one year, and fines may start from S$2,000. The maximum fine of S$10,000 for such offenders remains unchanged under the proposed changes.

In response to media queries, an MOM spokesperson said: “The CPF Act will be amended to effect various CPF policy changes. Various technical amendments will also be made to streamline the administration of CPF matters.”

The move to step up punishment for these errant employers follows a rise in the number of such cases and the sums involved.

In May this year, the CPF Board revealed that it recovered some S$293 million-worth of CPF arrears, including late payments, for more than 200,000 workers last year.

About S$9.4 million of the amount was recovered from 4,000 companies who underpaid (66 per cent) or did not pay CPF. The remaining recovered sum of S$238.7 million were from 3,100 employers who made late contributions.

In contrast, 10,000 workers from 3,700 companies were owed about S$9.5 million in arrears in 2011. Nearly three-quarters of these companies had underpaid, while the remainder did not make contributions to their employees’ CPF accounts.

In 2010, the board also recovered S$9.5 million of arrears from 2,600 companies, which they owed to about 6,000 workers.

Writing on his ministry’s blog in May, Acting Manpower Minister Tan Chuan-Jin said the amount of CPF arrears recovered last year was “indeed not small and is a cause of concern”.

“By upping the penalties, this will hopefully serve as a stronger deterrence for employers,” he wrote.

“I also hope this will help to ensure that every employee is given timely CPF contributions and that no worker is deprived of what is rightfully his or hers.”

The Amendment Bill also seeks to expand the scope of inspectors’ powers to ensure greater compliance by companies. The MOM wants to allow officers to obtain information, documents or records during enforcement inspections.

Since November last year, the MOM and the CPF Board have increased their inspections ten-fold to 5,000 each year. Greater focus has been placed on the food and beverage, retail, security and cleaning industries, “where non-compliance with the CPF Act and the Employment Act tends to be higher”.

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