Lianhe Zaobao, 21 May 2012
TAN CHUAN-JIN: GOVERNMENT WILL STEP UP PROTECTION OF THE RIGHTS OF LOW-WAGE WORKERS
Minister of State for National Development and Manpower Tan Chuan-Jin said that in order to reduce the number of people who lose out on subsidies due to breaches of the CPF Act by their employers, the Ministry of Manpower will expand the size of its investigation team and step up enforcement such that the number of enforcement actions each year will be increased from around 500 now to 5,000.
The government will soon be stepping up protection of the rights of low wage workers including ensuring that employers pay their CPF contributions regularly and that the workers get the subsidies they are entitled to.
Many subsidies and incentives targeted at low-wage workers in Singapore are issued through the CPF system. Minister of State for National Development and Manpower Tan Chuan-Jin revealed in an interview with Lianhe Zaobao that in order to reduce the number of people who lose out on subsidies due to breaches of the CPF Act by their employers, the Ministry of Manpower will expand the size of its investigation team and step up enforcement such that the number of enforcement actions each year will be increased from around 500 now to 5,000.
He said: “Strengthening the enforcement of the CPF Act is part of the review of the Employment Act. A large part of this is actually aimed at low-wage workers to ensure that they get the CPF savings and other financial subsidies that they are entitled to.”
Mr Tan pointed out that enforcement will focus on industries where violations are more severe, such as F&B, retail, cleaning and security. These sectors traditionally hire a larger number of low wage workers.
Currently, enforcement is being carried out by staff from the Manpower Ministry and the CPF Board. In order to step up enforcement, the Manpower Ministry will be issuing a tender to strengthen its investigation resources. Other than checking on whether employers are making CPF contributions regularly, the enforcement personnel will also conduct spot-checks at workplaces to find out whether employers are complying with the Employment Act, including regulations on working hours, working conditions and annual and sick leave.
With the average life expectancy growing in Singapore, the issue of whether seniors have sufficient savings has become a growing concern. Mr Tan pointed out that if individuals fail to accumulate sufficient CPF savings when they have the ability to work, then this will ultimately affect the retirement years of Singaporeans.
Last year, the CPF Board managed to recover $9.5 million in CPF contributions owed to 10,000 employees. There were 3,700 errant companies, a 42% increase from 2010.
Ministry of Manpower (MOM) figures show that if a 55-year-old worker making $1,000 a month does not have a CPF account, then he will have lost out on more than $9,000 in financial and Medisave subsidies issued under Workfare over the past five years. If this is added to the amount of CPF that his employer should have paid him, his losses would total more than $20,000, or almost a third of his wages.
Despite this, there are still some low-wage workers who come to agreements with their employers not to have CPF so that they can have more cash each month.
Mr Tan stressed in the interview that such arrangements are against the law. Other than enforcement, MOM and the CPF Board will also step up public education efforts with the tripartite partners to correct any misconceptions about the CPF system among Singaporeans and raise awareness in workers about their rights under the CPF Act.
Incentive scheme to be reviewed next year
The government introduced the Workfare Income Supplement (WIS) scheme in 2007 to allow those who work at least two months a quarter and who make less than $1,700 a month on average to get subsidies through their CPF account. Last year, 40,000 low-wage workers received a total of more than $400 million under the scheme.
Though this programme has helped low-wage workers raise their income, it has also been the target of criticism. For example, some feel that the cash subsidy component is too low and sufficient to effectively deal with daily expenditures. For every $100 received by an individual under WIS, $71 goes into the CPF account and only $29 is disbursed in cash.
The government will be reviewing this scheme next year. Mr Tan pointed out that one way of drawing more people to the scheme is to raise the cash component.
Mr Tan said: “It is understandable that low-wage workers would be concerned about how much cash they get in their hands. Can we adjust the subsidy percentage such that workers get more cash? I think this is a possibility that we can explore.”
The government has said that it will focus more on the industries where wages are low, such as cleaning and security, and take targeted measures to help workers in these sectors raise their wages.
When asked how much of a wage increase he hopes to achieve for these low-wage workers, Mr Tan cited the example of the cleaning sector. He said that the accreditation of cleaning companies will be linked to the wages of their workers. Through “best sourcing”, the government will outsource work to accredited contractors or those with good track records.
Lim Meow Nar