News

Gov Considering Making CPF Contributions Compulsory from Platforms Like Grab or foodpanda

2022-03-05 , 11:32 am

One good thing about becoming a private-hire driver, or food deliverer, is that you become your own boss.

You arrange your own time and your earnings depend on how hard you work.

Now, the bad part of becoming such platform workers is, ironically, that you’ve become your own boss.

Unlike full-time employment, you don’t have paid sick leave, you have to fight for your own business and you have to plan for your own retirement.

Well, if you’re a platform worker and these are issues that you’re facing, I’ve got good news for you.

Government Looking At Getting Platform Workers More Help

On 4 Mar 2022, Senior Minister of State for Manpower Dr Koh Poh Koon revealed that the Ministry of Manpower (MOM) is looking at getting more help for platform workers.

An Advisory Committee on Platform Workers was formed back in September 2021 to look into the challenges of platform workers.

Made up of representatives from tripartite partners, the committee identified two key challenges:

Platform workers are concerned about their current and future needs, especially saving for retirement
A lack of avenue for such workers to raise their concerns

Considering Making CPF Contributions Compulsory For Platform Workers

For the first challenge, the committee is considering the avenue of making platforms like Grab and foodpanda pay mandatory CPF contributions.

According to a recent survey by the Institute of Policy Studies (IPS), 84% of platform workers are concerned about retirement savings.

Their own public consultation exercise with partners also revealed that more than 50% of platform workers felt mandatory CPF contributions would help them in their retirement and housing needs.

“Clearly, this concern warrants intervention. Failure to do so will result in unmet needs in the future and impose costs on other parts of society.”

Currently, these workers are contributing 10.5% of their income to their CPF Medisave account, but they are considering getting the companies to support their retirement and housing needs.

Of course, while this means platform workers will have to contribute 20% of their income, in exchange for that 20% (which will remain theirs), the company also has to pay an additional 17% to their Ordinary and Special Accounts.

Or maybe it’s just the company paying 17%. Nothing is cast to stone yet.

Union For Platform Workers

As for a lack of avenues for platform workers to raise their concerns, the government is considering forming a union for them.

This will give them a voice in cases of dispute and input in contractual terms to safeguard their well-being.

One good thing is that companies are not opposed to protecting the well-being of their employees.

“Suggestions from the platforms include the establishment of industry-wide norms through tripartite discussions or with an independent body.”

Currently, forming a union for the workers is one of the possible solutions being studied.

Will This Result in a Jump in Business Cost?

I know what you’re thinking: wah, like that, will my GrabFood cost S$8 in the future for a bowl of meepok?

Dr Koh assures people who are concerned about a jump in business costs that will (likely) be passed on to consumers.

There will be a step-by-step approach so that all partners can adjust to the changes.

Eventually, the committee’s recommendations will lead to a more sustainable position.

“The eventual recommendations will contribute towards a more sustainable equilibrium – one where the costs of labour protections are more equitably distributed and shared across each stakeholder in the platform ecosystem.”

In other words, some of the costs will pass on, but hopefully not all.

On a side note, for freelancers and gig workers in Singapore, you can consider visiting the Freelancer and Self-Employed Unit (U FSE) website for tips and resources on how to protect and develop yourself.