Heftier fine, jail for employers that flout CPF rules

Heftier fine, jail for employers that flout CPF rules
These tough measures follow the CPF Board's announcement in May this year that it recovered a staggering $293 million last year in arrears from errant companies.

Employers who do not pay, underpay or are late in making contributions to their workers' Central Provident Fund (CPF) accounts could be jailed or face stiffer fines, or both, under a new Bill introduced in Parliament on Monday.


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Here is the full transcipt in Parliament about employers in breach of the CPF Act, and cases of non-payment of employees' salaries:

Dr Chia Shi-Lu: To ask the Acting Minister for Manpower (a) in each of the last three years, how many employers had violated the CPF Act by deducting monies from their employees' salaries for the employer's CPF contributions; (b) what was the profile of such employees and employers; (c) what were the reasons for such violations; and (d) whether there are new measures to protect such vulnerable workers.

Mr Tan Chuan-Jin: From January 2010 to July 2013, a total of 61 employers, or average of 17 employers per year, were found to have deducted monies from their employee's salaries for the employer's CPF contributions. These employers are spread out across various industries, with no specific profile due to the low volume of violat ions. Some of the reasons for violations include ignorance of CPF rules, or employers who erroneously made such deductions for their foreign employees who obtained PR status.

Upon our investigation and demand for rectification by the CPF Board, a total of about $ 240,000 in excess deductions were refunded by employers to their employees affected. Under S7(5) of the CPF Act, it is an offence for employers to make excessive deduction of CPF contributions from their employees. For the 61 employers found to ha ve made excessive deduction of CPF contributions from their employees, all of them paid back the excess deductions to their employees. [Any person convicted of such an offence shall be liable to a fine not exceeding $2,500 and in the case of a second or su bsequent conviction, to a fine not exceeding $10,000 as provided under S61 of the CPF Act].

CPF Board treats excessive deductions and other non - compliance of the CPF Act seriously. Under the "WorkRight" programme jointly launched by MOM and CPF Board, we have stepped up compliance with the CPF Act, as well as the Employment Act, through a two - prong approach - education and enforcement. Through education, we are raising awareness among employers and employees about their obligations and rights under the CPF Act and Employment Act. We currently distribute employer and worker - targeted "WorkRight" guidebooks (available in our four official languages) through self - help groups, SNEF, NTUC, training providers and industry partners. Members of Parliament would have received these multi - lingual worker guidebooks that you could give out to residents. The proposed amendment to the Employment Act requiring employers to issue itemised pay slips to their employees will also be a boost to raising national awareness and com pliance. On the enforcement front, we have been stepping up the number of inspections. We are concurrently reviewing the penalties under the CPF Act and Employment Act to ensure that they have the required deterrent effect on recalcitrant employers.

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