Heftier fine, jail for employers that flout CPF rules
PUBLISHED ONOctober 21, 2013 9:48 AMByGoh Chin Lian
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.
Mr Zainal Sapari: To ask the Acting Minister for Manpower for the past three years
(a) how many cases of non - payment of salaries are valid and taken up by the Ministry for follow - up actions;
(b) w hat are the reasons quoted by the employers for the non - payment of salaries;
(c) how does the Ministry help workers recover their unpaid salaries; and
(d) what is the success rate in getting employers to pay what is due to the workers.
Mr Tan Chuan - Jin: Workers can file salary claims with the Commissioner for Labour. The Commissioner will inquire into the case and determine the amount that the employer has to pay if the claim is valid.
The Commissioner for Labour has inquired into a total of some 3,8 00 salary claims, between 2010 and 2012. In about three - quarters of these cases, the employers made payment to their workers.
In the remaining one quarter, the employers did not pay up. Workers in such a situation can enforce the payment by way of writ o f seizure and sale through the Subordinate Courts. This process does not require them to engage a lawyer. MOM officers will facilitate the process by advising workers on the procedures involved, and helping them prepare the necessary documents. However, mo st of these defaulting employers were small companies in financial difficulty or which had ceased operations.
Let me also stress that every worker has the right to be paid in full and on time. MOM has tightened our processes and we will send a clear sign al to every employer that not paying their workers' salaries is unacceptable and doing so will attract a consequence, including prosecution actions. Later this year, we will be enhancing the penalties under the Employment Act for errant employers who fail to pay workers' salaries.
Repeal and re-enactment of section 61
Section 61 of the principal Act is repealed and the following section substituted therefor:
"General penalties
61 (1) Except as otherwise provided in subsection (2), any person convicted of an offence under this Act for which no penalty is provided shall be liable on conviction
a. to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 6 months or to both; and
b. if that person is a repeat offender in relation to the same offence, to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months or to both
(2) Where any person
a. is guilty of an offence under section 7(5) or 58(b); or
b. being a director, manager or secretary or any other officer of a body corporate, is guilty of an offence under section 60 by virtue of the fact that an offence under section 7(3) or (5) or 58(b) has been committed by that 20 body corporate and is found to have been committed with the consent or connivance of or to be attributable to any act or default on the part of that person,
that person shall be liable on conviction
(i) to a fine of not less than $1,000 and not more than 25 $5,000 or to imprisonment for a term not exceeding 6 months or to both; and
(ii) if that person is a repeat offender in relation to the same offence, to a fine of not less than $2,000 and not more than $10,000 or to imprisonment for a term not 30 exceeding 12 months or to both.
(3) For the purposes of subsections (1) and (2), a person is a repeat offender in relation to an offence (referred to in this subsection as the current offence) if the person has been convicted of the same offence on at least one other occasion (whether before, on or after the date of commencement of section 18 of the Central Provident Fund (Amendment) Act 2013) before the person is convicted of the current offence. ".