Freelancers should get work contracts, insurance, and Medisave, suggests Tripartite Workgroup

SINGAPORE — The Tripartite Workgroup (TWG) has come up with proposal to help boost freelancers’ Medisave savings, as they called on the Government to study and potentially adopt a model where service buyers pay a portion of their freelancers’ pay to their Medisave accounts.

This was among the seven ideas proposed by the TWG, which was formed last March, following a nine-month study of the challenges faced by freelancers amid the rise of the gig economy.

They include insurance to protect against the loss of income should they suffer injury at work, voluntary standards for written contracts, and greater support for them on matters such as pay disputes.

In response, Second Minister for Manpower Josephine Teo said in a letter to TWG that she has accepted the recommendations, which “will help shape the Government’s strategies” to address concerns raised by self-employed individuals.

“I intend to provide a fuller response during the Committee of Supply parliamentary debates next month,” said Mrs Teo in the letter dated Feb 20.

“This will include an outline of measures to implement the recommendations and the expected timelines.”

PERSONAL RESPONSIBILITY

Over the last decade, the proportion of freelance workers has remained consistent at about eight to 10 per cent of the country’s workforce, which currently numbers to around 200,000. Mirroring the trends of Singapore’s labour workforce, self-employed people are also older, more educated and earn higher incomes, according to the Ministry of Manpower’s (MOM) figures.

In making the recommendations, TWG said that the freelancers’ decisions to be their own bosses was one of the guiding principles, and that “personal responsibility should remain the core principle for their own well-being.”

“The TWG does not intend to crimp the choices of those who opt for the flexibility and autonomy of self-employment, nor to shield self-employed persons from market risks, such as competition from the emerging digital economy and volatility in volume of business,” said TWG in its report.

Chairman of TWG Augustin Lee said that the aim is to provide more support to freelancers, and help make their career choice a “more sustainable one”.

“This we must do regardless of whether the pool of self-employed persons grows in the future,” added Mr Lee, who is also MOM’s deputy secretary.

HELPING & PROTECTING FREELANCERS

TWG’s study found four common concerns among freelancers: payment-related disputes, loss of income due to prolonged illness or injury, lack of Central Provident Fund (CPF) savings for healthcare and retirement, as well as lack of support to develop and upgrade their skills.

The report said that about a quarter of freelancers are not able to make the mandatory Medisave contribution in a timely manner.

About 86 per cent of freelancers aged 55 and above do not have sufficient CPF savings to receive the Basic Retirement Sum payout of between S$720 to S$770. In contrast, only 42 per cent of regular workers in the same age group are unable to do so.

The key reasons for this include the time lag between “when they earn and when they have to contribute”, as well as cash constraints, said the report.

Adopting a contribute-as-you-earn model will entail making a Medisave contribution the moment freelancers are paid, said the TWG’s suggestion.

This is based on a similar model in Chile, where it is mandatory for freelancers to contribute to their pensions when they are paid for their services, said TWG. Service buyers are also required to channel a portion of the service fees owed to freelancers into their pension accounts.

As such a model does not exist here, the workgroup said that the Government should study it and look at how it can work for intermediaries not directly involved in paying freelancers.

There should also be a voluntary standard for written contracts to avoid instances of payment-related disputes involving freelancers, although such cases are “not rampant”, noted the TWG report. Such standards have been introduced in other areas, including guidelines on how employers should handle grievances raised by workers.

The suggestion comes as freelancers flagged concerns that some service-buyers do not even provide such contracts. Even if they do, the contracts lack important details such as the payment schedule, and payment amount.

Currently, the Tripartite Alliance for Dispute Management (TADM) provides mediation services to regular workers and their employers, but TWG suggested that this be extended to freelancers and service buyers.

Acknowledging that there is a “gap in the protection against loss of income due to prolonged illness or injury”, TWG said that this could due to the “small and fragmented” demand among freelancers.

In order to close the gap, TWG suggested that tripartite partners work with the insurance industry to create an insurance product that provides daily cash benefit for hospitalisation episodes exceeding one to three days, or prolonged medical leave exceeding seven to 14 days.

The workgroup said it had considered whether such insurance should be made compulsory for all freelancers, but it noted that the majority work in jobs that are desk-bound, such as website designers “where the risk of injury is low”.

But for those in higher-risk occupations, the workgroup suggested that the Government encourage insurance take-up through “licensing controls”, although it did not provide details.

Associations representing self-employed people should also come up with “competency frameworks”so that freelancers can keep their skills current.

Ms Yeo Wan Ling, chief executive of Caregiver Asia, said that the firm is currently in talks with partners to create a range of insurance products for its freelancers to give them assurance and security. Caregiver Asia is an online platform that matches over 2,000 of its freelance caregivers, including nurses, to families.

“A blanket coverage will in particular be good news for freelancers in fields that are not represented by associations,” she said.