The CPF Board (CPFB) today announced that in 2016, there were 22 convictions for non-payment and underpayment of CPF and 350 convictions for late payment last year.
According to a media statement, all convicted employers were fined and ordered to pay the CPF arrears by the State Court.
At the same time, the CPFB revealed that it has recovered about S$635.1 million in CPF arrears from cases closed in 2016; significantly more than the S$516mn recovered in 2015.
The amount recovered was owed to over 380,000 employees from underpayment, non-payment and late payment of CPF contributions by employers.
S$19.7 million recovered from underpayment and non-payment
In 2016, the CPFB recovered S$19.7 million – owed to 16,202 employees by 1,608 employers – from underpayment or non-payment of CPF contributions. Among these cases, only 32 employers voluntarily came forward to self-rectify upon realising they were not compliant with the CPF Act.
According to the statement, the highest amount recovered through self-rectification was from a financial sector employer who informed CPFB in March 2016 that they had wrongly classified their employees’ incentives payments as Ordinary Wages (OW) instead of Additional Wages (AW).
This resulted in underpayment of CPF contributions as the company had applied the monthly OW ceiling when computing CPF contributions for their employees instead of the annual AW ceiling.
After the CPF Board verified with the employer’s records, the employer paid up CPF arrears amounting to more than S$400,000 for the period between 2004 and 2016 – this benefited about 180 employees.
“The CPFB also actively follows up on feedback from members of the public to help workers recover their due CPF contributions,” the statement noted.
One such case was when it received an anonymous feedback in March 2015 that a restaurant was not paying CPF for their part-time employees.
Acting on the feedback, the CPFB conducted a field visit to the restaurant. The employer admitted that he did not pay CPF for their part-time employees and claimed he was not aware that part-time employers were also eligible for CPF contributions. The CPFB then worked out an instalment plan to help the employer fully pay up the CPF arrears amounting to about S$50,000 for 118 employees for the period between January 2013 and March 2015.
S$615.4 million recovered from late payment
The remaining S$615.4 million recovered were late CPF contributions from an average of about 5,440 employers each month in 2016. CPFB’s timely detection and follow-up enforcement actions assisted more than 363,000 workers in receiving their due CPF contributions, with most of the late payments recovered within a month.
CPFB group director of employer collections and enforcement, Belinda Teoh said, “Through the Board’s three-pronged approach of education, deterrence and enforcement, we are able to help CPF members recover owed and late CPF contributions from employers.
“This year, we are particularly encouraged by the 32 employers who came forward to self-rectify in 2016 which resulted in the recovery of about S$1.0 million in arrears for about 800 employees. We will continue to increase awareness among employers of their duty and responsibility to meet their CPF obligations so as to help members meet their retirement, housing and healthcare needs.”
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