The Straits Times reported a few days ago that the Central Provident Fund (CPF) Board clawed back nearly $2.7 billion over the past 5 years of unpaid CPF contributions from employers, to return to hundreds of thousands of employees.
Lower-income casual staff make up the majority of vulnerable workers often not paid CPF contributions by errant employers. According to ST, the figure last year alone was $595.9 million, up from $378.2 million in 2014, suggesting that the problem is not waning.
For most Singaporeans engaging in part-time work, many are not aware that they are entitled to CPF contributions. If an employee earns more than $50 a month, employers are required to make CPF contributions to the employee. Employees are required to make CPF contributions once they earn more than $500 a month.
Why Does This Matter?
Casual workers take on ad hoc jobs as and when they please, unlike employees on permanent or fixed-term contracts. While there are many who aren’t aware of the CPF contributions they’re missing out on, those who are aware don’t seem to care, especially if they’re paid in cash.
While CPF contributions may seem insignificant at first glance, it is a significant amount that you are missing out on, especially if you’re engaged in long term casual work. This is especially so for low-income elderly workers who engage in part-time casual work, as CPF contributions act as an additional safety net to help supplement their needs.
Having worked casually in a cafe as a part-time barista and service crew near my place, here’s an example of my payslip with CPF contribution:
From above, if I were to be paid $80 cash a month for my casual work, I will be missing out on a $14 CPF employer contribution. While this may not seem like much, it is equivalent to 3 meals a day for an average person.
Using the above example, my employer’s CPF contribution rate is 17.5% (14/80×100) for hiring a part-time worker my age (23 years old). Do note that this contribution rate may differ according to your age as well.
Let’s say you engage in a long-term part-time work at the same cafe, where your rate is $8/hr. Assuming that you work 5 hours a day, 3 days a week at the job for a year, here’s a comparison of how much you will earn with and without your CPF contribution:
|If You're Paid In Cash||If You're Paid With Your (entitled) CPF Contribution|
|Hours Of Work In A Month||60 hrs||60 hrs|
|Average Monthly Salary @ Cafe||$480/mth||$480/mth|
|CPF Contribution By Employer?||No||$84/mth|
|In 1 year? (x12 months)||$5,760||$6,768|
From the above, in just one year, you will be losing $1,008 in CPF contribution by doing the exact same job, just because you’re being paid in cash!
Here’s How You Can Check If You’re Being Scammed By Your Employer
How To Check On Your CPF Contribution Rates
|Step 1||Go to the CPF Website||Visit www.cpf.gov.sg and login under my cpf Online Services|
|Step 2||Login to MyCPF Online Services with your SingPass||Login with your SingPass ID and password.
If you have forgotten/do not have a password, there are links within the page to retrieve them.
|Step 3||View Your Statement||Click on 'My Statement'. You will see your account balance in Section A. Click the PDF tab on the right-hand corner, it will lead you to Section B.|
|Step 4||Retrieve your CPF Contribution History||Go to Section B
Click "Contribution History up to the last 15 months" under History Type.
Please select your contribution history for the past 6 months
|Step 5||Download your CPF Contribution History Statement||Download your statement by clicking the adobe icon to download it in PDF format.|
|Step 6||Save your downloaded document||You can now save and view your CPF contributed statement.|
Source: Standard Chartered Bank | Website
For Employers who have absolutely no idea that you’re supposed to pay your employees CPF contributions, you can start by following this relatively simple guide.
I hold multiple part-time jobs, do all employers need to pay me CPF?
If you are concurrently employed by more than one employer, all your employers must pay CPF contributions based on the wages payable to you. You are eligible for CPF if you are earning more than $50/month for an employer.
However, for some reason, if you choose to limit your CPF contributions by employers, you can also opt for it by following this step-by-step guide by CPF.
What Happens If I’m Not Paid CPF Contribution By An Employer? What Do I Do?
CPF Board and MOM have started the WorkRight Initiative to ensure that all employees especially low-wage members, get basic employment rights under the law.
If your employer(s) did not pay or underpay your CPF contributions, you can email [email protected] or call 1800-221-9922. Your identity will be kept strictly confidential.
What Are The Punishments For Employers Who Do Not Contribute CPF To Their Employees?
Upon detection of late payment or non-payment of CPF contributions, actions will be taken to recover any arrears or CPF contributions owing. Interest on late payment and a composition amount may be imposed on the defaulting employers.
Employers, who have recovered the employee’s share of contributions and have failed to pay the contributions to the Board may be fined up to $10,000 and/or up to 7 years’ imprisonment.
To see how much trouble your employer will get into, you can also refer to this flowchart.
Defaulting On Employee’s CPF Contribution Payments
I’m not sure about you, but as a teenager, I’ve worked numerous part-time jobs- as an events coordinator, an usher, in F&B etc. As a clueless, secondary school first-jobber, I have been shortchanged on my employer CPF contributions, due to ignorance.
“Don’t be so calculative, a few dollars isn’t worth the hassle,” some of you would have told me.
It’s true: shortchanging teenagers for a few bucks may not be a huge issue, especially when they themselves do not mind as long as they get a couple of quick cash.
Yet, this issue becomes even more problematic, especially when employers are shortchanging low-income elderly or people in single-parent households working part-time casual work. For these groups of people, the difference of a few dollars will compound to give them some form of safety net when they grow old.
Know any business owners who do not know that they have to contribute to their employees’ CPF? Do share this article with them today!
If you have problems regarding CPF contribution, either as an employer or an employee, don’t hesitate to ask our community on the Seedly Q&A, we are always here to help :).