There was a recent article about employers who underpay, do not pay, or are late in contributing to their workers’ Central Provident Fund (CPF) accounts. There are some amendments to the CPF Act. The employers could now face more serious penalties.
Previously, the maximum fine for a first offender is S$2,500. But, now the maximum fine had doubled to S$5,000. On top of that, first time offenders could face imprisonment of up to six months as well.
As for repeated offenders, the jail terms could be up to one year, and a maximum fine of S$10,000 applies.
Did you know that in May 2013 this year, the CPF Board had recovered some S$293 million-worth of CPF arrears, including late payments?
Here are some facts: About S$9.4 million of the amount was recovered from 66% of companies (amounting to about 4,000 companies) who underpaid or did not pay CPF. The remaining recovered sum of S$238.7 million was from 33% of companies (about 3,100 employers) who made late contributions.
The amount of CPF arrears recovered is definitely not a small sum, and this could be a cause of concern.
Increasing the fines and penalties seems inevitable. This would probably provide a stronger deterrence for employers and greater compliance of CPF matters by companies. Research had shown that non-compliance with the CPF and Employment Act tends to be higher in the food and beverage, retail, security and cleaning industries.
At J Accounting Services, we believe that every employee should be given timely CPF contributions. No worker in particular should be deprived of what rightfully belongs to him or her.
If you as an employer are looking for assistance in any aspect of your workers’ CPF accounts, do take a look at what this website (http://www.j-accountingservices.com) have to offer you. Well, if you intend to engage a third party service provider to provide you with CPF services, there are many professional firms in Singapore offering such services.
Remember to make the right contributions and to promptly contribute to your workers’ CPF accounts. Do not break the CPF rules!
