COMPANIES WHO FAIL TO PAY EMPLOYEES' CPF CONTRIBUTIONS

COMPANIES WHO FAIL TO PAY EMPLOYEES' CPF CONTRIBUTIONS

30.

Mr Terry Lee asked the Minister for Manpower in 2009 (a) how many employers failed to pay their CPF contributions; (b) what was the total outstanding amount; (c) what were the reasons for their default in payment; and (d) what was the impact on the workers.

Mr Gan Kim Yong: Employers are obligated to contribute to the CPF of their workers. Defaults by employers will adversely affect their employees' CPF savings. There are stiff penalties for non-compliance, including fines and punitive interest on unpaid contributions. CPF Board conducts checks on employers to enforce against non-payment. It also follows up on complaints received.

CPF Board tracks, on a monthly basis, the number of employers who owe CPF for at least two consecutive months. Last year, there were 5,733 such employers, or about 5% of all active employers. However, the majority of these employers have paid up their arrears. As of end December 2009, 573 remained in arrears, and the outstanding CPF contribution they owed totalled $3.3 million and affected about 3,500 employees. Most late payment cases were compounded, with 271 employers being eventually convicted in court in 2009 for failing to pay CPF contributions. Such employers often cite poor business or cash flow problems as reasons for failing to pay CPF on time.

CPF Board also conducts audits and investigations on under-payment and non-payment of CPF. In 2009, such investigations uncovered about 3,000 errant employers, or about

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2.6% of all active employers, and about 7,500 affected employees. CPF Board's intervention efforts led to the recovery of $30.4 million in unpaid CPF from these employers.

CPF Board also regularly conducts briefings and seminars for both employers and employees to help them better understand their rights and obligations. In addition, through tripartite efforts, 24,000 informal workers were converted to formal employment, enabling them to receive CPF regularly.

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