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Written Answer by Mrs Josephine Teo Minister of Manpower to Parliamentary Question on Misclassification of Workers as SEPs

NOTICE PAPER NO. 1599 OF 2019 FOR THE SITTING ON OR AFTER 1 APRIL 2019

QUESTION NO. 1193 FOR WRITTEN ANSWER

NMP: Assoc Prof Walter Theseira

To ask the Minister for Manpower (a) for each of the last three years, how many workers have been misclassified as self-employed persons when they should be classified as employees; (b) what are the major sectors or jobs where such misclassification has occurred; (c) whether there are links between emerging technologies or business models and self-employment misclassification; and (d) what are the actions taken to resolve misclassification including any penalties meted out to employers.

Answer

  1. In the last three years, the Ministry of Manpower (MOM) and Central Provident Fund (CPF) Board received a total of 308 cases of suspected misclassification. In 160 cases, workers were assessed to be misclassified as self-employed persons (SEPs) . Each case that MOM and CPF Board investigate into could involve more than one worker. On average, about 100 workers per year were found to be misclassified. 
  2. In all but two of these misclassification cases, employers made good their obligations when informed of the misclassification, and paid back the affected employees what they were due, including overtime pay and CPF contributions. Penalties including warning and late payment interest charges were meted out to the companies. The two companies which refused to make the necessary payments to the affected employees were prosecuted. One subsequently fully settled the arrears out of Court while the other is currently appealing against its conviction.
  3. The majority of these cases occurred in the contract labour suppliers, transport and logistics, construction and education sectors. The common occupations where such misclassification occurred include promoters, drivers, crane operators, service agents and carpenters.
  4. The proportion of SEPs has remained stable at 8-10% of the resident workforce over the last decade. We have not observed a link between emerging technologies or business models and self-employment misclassification.

[1] Self-employed persons (SEPs) here refer to own account workers who operate their own business without hiring any paid employees. It does not include other self-employed categories such as ‘employers’ and ‘contributing family workers’.