Singapore gig workers split on whether they want mandatory Central Provident Fund contributions, says committee

SINGAPORE, Nov 16 — Consultations with more than 20,000 gig workers found that opinions were divided on whether there should be mandatory Central Provident Fund (CPF) contributions, with half wanting them and the other half mainly concerned about the impact on their take-home earnings.

Among those who wanted mandatory CPF contributions were younger workers who said they could use them to pay for their housing. But some opposed it because they had already paid off their housing loans and had other plans to fund their retirement.

This was revealed yesterday at an engagement session by the Advisory Committee on Platform Workers, which was set up by the Ministry of Manpower last year to propose ways to strengthen protections for platform workers here.

These workers include delivery riders, private-hire car drivers and taxi drivers, and account for about 79,000 workers or 3 per cent of Singapore’s resident workforce.

The advisory committee comprises representatives from the Government, unions, academia and industry players.

Over the past year, the advisory committee also spoke with 20 platform companies and industry associations.

While companies recognised that workers needed support for housing and retirement needs, they were concerned with the impact on business costs and asked for a longer phase-in period.

Some also felt that they should contribute lower CPF rates than what employers of full-time workers contribute due to the nature of gig work.

At present, these workers contribute up to 10.5 per cent of their earnings to their CPF Medisave accounts for healthcare needs.

At the engagement session yesterday with platform workers and companies, committee chair Goh Swee Chen said it is proposing contributions to workers’ CPF Ordinary and Special Accounts as well for retirement and housing needs.

“What we are recommending is to step up to the next level,” said Goh, who also chairs the Institute for Human Resource Professionals.

“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,” she added.

“Our thinking is where the need is the most, it will be mandated... we could consider CPF as voluntary in certain categories of workers.”

During the session, a participant asked what measures will be in place to ensure platform companies will not pass the cost of CPF contributions back to the workers.

Goh said that the committee has put in a proposal to the Government to consider providing support in the transition period to allay costs.

Dr Koh Poh Koon, a committee advisor and Senior Minister of State for Manpower, added that in a competitive market, the cost that is passed onto workers could be brought down as workers compare which company pays them higher rates.

“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 employers),” he said.

These recommendations, however, will be introduced in phases so that the market can adjust to the higher costs, he added.

Speaking to reporters after the event, Dr Koh said that implementing the recommendations would take time as laws would need to be amended or introduced, which alone would take at least close to a year.

The session on Tuesday, attended by 20 representatives from platform companies and 20 platform workers, caps the year-long engagements held by the committee since it was formed after the National Day Rally in September last year.

Its full recommendations will be published next week.

Asked why it took more than a year for the committee to come up with recommendations, Dr Koh told reporters that the committee’s work was complex as it needed to reach out to workers from diverse groups of young and old workers as well as those who work many hours and others who only work casually.

Platform companies also have somewhat different business models and serve varying customer segments, he said.

“Given the complexity, the committee took the approach of really consulting widely,” he said, adding that in the early stages, the Covid-19 pandemic posed restrictions on large-scale engagements.

“We took the approach of not trying to set a fixed timeline... rather than have a hard stop and then not consult widely and then come up with recommendations that will not resonate with what the needs of the ground are.”

The Digital Platforms Industry Association (DPIA) said in a statement that it recognises that as the recommendations are gradually implemented, it will “inevitably impact costs which may affect rider earnings and consumer prices”.

“A recurring concern that we have been hearing from our rider partners is the potential drop in take-home earnings from them having to contribute to CPF, and whether gig work can continue to be a viable source of income for them and their family,” the association said.

“To mitigate the impact of these additional costs on riders’ earnings, DPIA members will work with the advisory committee to look into ways to ensure that implementation is carried out over a viable timeline to ensure gig work is still sustainable for our rider partners.”

Work injury insurance, unionising

Beyond CPF contributions, the committee was also tasked to look into strengthening financial protection in case of work injury and to enhance worker representation of their interests.

Its consultations found that most workers were concerned that injuries would affect their livelihoods and that the cost of a work injury insurance would impact their take-home earnings.

And while some platform firms — including Grab, Foodpanda and Deliveroo — offer voluntary insurance to their riders, workers said that coverage was uneven.

The platform firms agreed that workers should have financial protection but were, again, concerned with the impact on business costs as well as on how viable it would be to implement this.

Workers wanted stronger representation to better voice out and negotiate interests, citing operational and dispute resolution issues with platforms as areas they would like to see improved.

They also wanted platform companies to better address their concerns over earnings, future work prospects as well as terms and conditions of their contracts.

Platform companies, meanwhile, were concerned that representation could be onerous, saying that existing processes for engaging workers were sufficient.

In August, a separate tripartite workgroup on representation for platform workers was formed to study how to enhance representation of platform workers, with representatives from the Government, labour movement and the Singapore National Employers Federation. The workgroup aims to submit its recommendations to the Government before the end of this year.

Dr Koh said on Tuesday that once the workgroup completes its work, it would be “quite natural” for existing unions representing gig workers — the National Taxi Association and the National Delivery Champions Association — to take on their roles with a firmer mandate. — TODAY