CPF contributions will soon be made mandatory for platform workers. NTUC calls for support during this transition.

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TL:DR – Mandatory CPF contribution for platform workers from the part of both platform workers and platform companies are to kick in from the later part of 2024, at the earliest. NTUC will be rendering support during this transition. 

In his National Day Rally speech, Prime Minister Lee Hsien Loong acknowledged the lack of basic job protection that platform workers had and that the Ministry of Manpower was studying these issues. 

The Advisory Committee on Platform Workers was then set up by the Government and convened in September 2021 to work with tripartite partners to discuss on key issues that affect platform workers, such as their long-term retirement and housing adequacy, medical and injury coverage, and representing their interests.

Noting that platform workers generally have modest incomes but may have insufficient CPF funds, National Trades Union Congress (NTUC), in a statement on 15 November 2022, recommends for both platform workers and platform companies contribute CPF, to serve workers’ housing and retirement needs.

This recommendation was made by the Committee after extensively consulting over 20,000 platform workers. More details on the recommendations could be found here.

On 23 November 2022, the Government announced that they accept all 12 recommendations by the Committee and will implement the recommendations in a progressive manner from the later part of 2024 at the earliest.

This would mean that while platform workers will remain independent as gig workers, the relevant platform companies that have a significant level of management over these workers would have to provide them with certain basic protections. Of which, it would include CPF contributions.

Mandatory CPF Contribution

CPF contribution rates of platform companies and platform workers will be aligned with that of employers and employees respectively.

Given that the recommendations are targeted at providing financial adequacy for retirement and housing needs, the CPF contributions are mandatory for platform workers who are aged below 30 in the first year of implementation, to help these group of people who are likely at the age of trying to save up for their first home. Platform workers who are aged 30 and above in the first year of implementation will be given the flexibility to opt into the full CPF contribution regime.

To mitigate the impact on the take-home pay of the platform workers, the Committee recommends phasing in the increased CPF contributions over five years, unless major economic disruption warrants a longer timeline.

One of the considerations that we have taken into account… is to consider where the needs are greatest, because not all workers have the same need in terms of retirement and housing needs.

Ms Goh Swee Chen, Chairperson of Institute for Human Resource Professionals

To mitigate the impact on the take-home pay of the platform workers, the Committee recommends phasing in the increased CPF contributions over five years, unless major economic disruption warrants a longer timeline.

Financial Protection for Work Injury

Platform companies are to provide the same scope and level of work injury compensation as employees’ entitlement under the Work Injury Compensation Act (WICA), to ensure sufficient financial protection when they are injured at work.

However, with mandatory CPF contributions and increased financial protection for platform workers in place, it begs the questions of who bears the costs.

Who Bears the Costs?

In short, WE ALL DO.

This includes platform workers themselves, who will need to bear with the short-term “cost” of setting aside more for housing and retirement needs, although their total earnings including platform company CPF contributions are expected to be higher.

Platform companies and consumers will need to adjust to higher costs and prices of platform services.

Consumers may have to pay a little bit more. Workers may have a bit more (of a) total (salary) package because of the CPF contribution (from employer)

Dr Koh Poh Koon, Committee Advisor and Senior Minister of State for Manpower

It was heartening that survey findings and engagements done by the Committee indicate that Singaporean consumers are willing to pay a bit more for platform services to strengthen protections for platform workers. This is a recognition of the invaluable service and livelihood opportunities the platform provides.

Professor Danny Quah, Committee Vice-Chairman, Dean and Li Ka Shing Professor in Economics, Lee Kuan Yew School of Public Policy acknowledges that there are complex trade-offs between strengthening protections and flexibility, without overburdening business costs. He emphasized that “Implementation of the recommendations should be practical and sustainable for Platform Workers, businesses and consumers” and that “We should pace in the recommendations so that the market has time to gradually adjust.”

NTUC Calls to Support the Transition

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Following the announcement, NTUC issued a statement in support of the recommendation and calls for transitional support during the period of implementation.

To mitigate the impact on the take-home pay of platform workers when the recommendations are implemented, NTUC calls on the Government to provide sufficient support to platform workers when they contribute to their CPF and stand ready to work with the Government on this.

Under the accepted recommendations, platform workers will now also be given the right to seek formal representation through a new representation framework designed for platform workers. The formation of the Tripartite Workgroup (TWG) on Representation of Platform Workers in August this year, which NTUC is a member of, provides a platform for stakeholders to agree on workers’ representation and to set in place an enhanced framework that will close the imbalance between platforms and platform workers. This is on top of the existing NTUC associations that have been representing the interests of platform workers.

Support from the Labour Movement

NTUC stays committed to being the voice of platform workers in the areas of fair structures, fair terms and fair processes to ensure that they are treated fairly.

In her Facebook post following the acceptance of the recommendations, Ms Yeo Wan Ling, Advisor to the NTA, NPHVA and NDCA, and Director of NTUC U SME and U Women and Family, concur that the roll out of recommendations is a significant step forward in advancing the protection of platform workers and NTUC will be supporting platform workers throughout this journey.

More work lies ahead to operationalise the recommendations, and the NTUC is committed to ensure that the roll out is fair and are not at the expense of our workers’ earnings.

Ms Yeo Wan Ling, Advisor to the NTA, NPHVA and NDCA, and Director of NTUC U SME and U Women and Family

NTUC Secretary General Ng Chee Meng also reaffirms the public that NTUC will continue to call for support for all platform workers and stay committed to champion workers, fighting for better wages, welfare, and work prospects. 

We will work with the Government for potential transition measures to support our platform workers. Beyond these immediate steps, NTUC wants to ensure fair wages for the platform workers like we do for unionised workers – that their wages commensurate with their roles, and any measures put in place should not greatly impact their take-home pay. This is the way to ensure a sustainable way to promote better earnings, better welfare and better work prospects for my sisters and brothers in this industry.

Mr Ng Chee Meng, Secretary General of National Trades Union Congress

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