Singapore Update: Employment Topline for Platform Workers and others (November 2022)

There are important developments in Singapore relating to “Platform Workers” i.e. delivery workers, private-hire car drivers and taxi drivers who use online platforms to match them with demand for their delivery and point-to-point transport services, but who are not employees of the companies operating these platforms (“Platform Companies”). Such individuals would typically have been regarded as independent contractors. This classification will not change but there will be new protections for these Platform Workers. Separately, we also set out reminders below on the Progressive Wage Model (“PWM”) that was recently expanded on 1 September 2022.

We share some key highlights along with our brief comments. 

A.              Recommendations by Advisory Committee on Platform Workers to be accepted by way of Legislation

1.               On 23 November 2022, the Ministry of Manpower (“MOM”) announced that the Government has accepted all 12 recommendations by the Advisory Committee on Platform Workers (“Advisory Committee”). Critically, the Advisory Committee has recommended that Platform Workers should not be classified as employees, but will require Platform Companies (exerting significant management control over them) to provide certain basic protections. The recommendations will commence implementation from the later part of 2024 at the earliest. Some of these are:

(a)        Paying work injury compensation. Platform Companies must provide workers with work injury compensation similar to that which is provided to employees under the Work Injury Compensation Act. The Platform Company that the Platform Worker was working for at the time of injury bears the compensation, based on the Platform Worker’s total earnings from the platform sector in which the injury was sustained. In this regard, there will be sector-specific definitions enacted for when a Platform Worker is “at work”, to account for difference in the nature of work between the ride-hail, food delivery and goods delivery platform sectors.

(b)       Contributing to CPF. Platform Companies must, in the first year of implementation, contribute CPF to Platform Workers aged below 30 years, while allowing Platform Workers aged 30 and above a choice to opt in to the full CPF contribution regime. Over the next five years, the contribution rates will be progressively aligned with that of employers and employees. Platform Companies will also need to collect Platform Workers’ CPF contributions. 

(c)      Giving Right to Formal Representation. A new Tripartite Workgroup (“TWG”) will be set up to give Platform Workers the right to be formally represented. The TWG will work out a representation framework for collective representation and negotiations with Platform Companies.

2.                Our comments – the new rules will have financial impact to Platform Companies arising from work injury compensation and CPF. Not only is it the right thing to do, there is now more reason to further examine strengthening workplace safety. On CPF, we highlight that Platform Companies need to be careful if reworking existing compensation. Under the rules applicable to an employment relationship, an employee’s basic salary excludes employer’s CPF contributions. Hence, where Platform Companies adjust existing compensation such that there is no real increase in compensation even with co-contribution, there are potential issues. Even as the precise rules are being worked out, Platform Companies need to bear this in mind when planning ahead.  Last, the right to formal representation will create an added dimension in the dynamics between Platform Companies and Platform Workers; hence any future changes in policy impacting Platform Workers must be scrutinised in that lens.

B.           [Reminder] Expansion of Progressive Wage Model (“PWM”) 

3.         Separately, further to our previous updates, the PWM was last expanded on 1 September 2022 for businesses employing any foreign worker to pay progressive wages to: 

(a)    their local in-house cleaners, security officers and landscape maintenance workers;

(b)    their local cashiers, retail assistants, retail supervisors and retail managers (if the business is in the retail sector); 

(c)    all their local workers at least the local qualifying salary, which is currently $1,400.

4.           Please be reminded to assess if your workers are performing any such PWM roles. Employers are required by MOM to update and submit such roles via its Occupational Employment Dataset (OED) portal.

We trust the above is helpful. Employment protection in Singapore is getting increasingly nuanced and the status quo in your business will need to be continually relooked. 

By Kala Anandarajah, RAJAH & TANN LLP, Singapore, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact singapore@transatlanticlaw.com

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