Written Answer to PQ on Late Payment Non-payment and Under-payment of CPF
NOTICE PAPER NO. 1992 OF 2023 FOR THE SITTING ON 3 JULY 2023
QUESTION NO. 3060 FOR WRITTEN ANSWER
MP: Mr Desmond Choo
To ask the Minister for Manpower (a) in the last three years, what is the number of employers who have failed to make the correct amount of CPF contributions promptly, resulting in late payment, non-payment or under-payment of CPF contributions; (b) how have these employers been identified; and (c) what are the reasons and root causes for the default in payments by such employers.
1. In the last three years, an average of about 2,800 employers per month (1.75% of all active employers) failed to make the correct amount of CPF contributions promptly (i.e. more than one month after the expiry of the grace period).
2. The CPF Board has put in place measures to detect CPF non-compliance by employers. This includes an automated system to detect employers who fail to make CPF payments by the deadline each month. In addition, CPFB conducts proactive audits targeted at employers in higher-risk industries and firms to check the accuracy of CPF paid by the employers. These measures are complemented by investigations on reports lodged by employees or whistle-blowers.
3. Common reasons for late CPF payments by employers include administrative lapses such as missed deadlines, failure to ensure sufficient funds for bank deduction as well as cash flow issues. Some employers also fail to make the correct CPF contributions because they have a wrong understanding of their obligations under the CPF Act. For instance, some employers may not be aware of the wage components that are subject to CPF contributions. For these cases, the CPF Board conducts campaigns and outreach to educate employers on their obligations. CPF Board also imposes late payment interest and in some cases a composition amount to ensure that employers make accurate and timely CPF contributions. Further enforcement actions, including prosecution, may be taken against egregious employers. Most employers eventually make good on their CPF obligations for their employees.