CPF: Some 2,800 employers fail to make correct, prompt contributions each month
Reasons for not making correct and prompt CPF contributions include missed deadlines and cash flow issues.
SINGAPORE — An average of about 2,800 employers per month – or 1.75 per cent of all active employers – failed to make the correct amount of Central Provident Fund (CPF) contributions promptly in the last three years, said the Ministry for Manpower (MOM).
MOM said this in a written reply on Monday (3 July) to a parliamentary questions asked by Member of Parliament (MP) for Tampines GRC Desmond Choo – he had asked about the number of employers who failed to make the correct amount of CPF contributions promptly in the last three years, whether they've been identified and their reasons for defaulting.
In the reply, MOM said that the CPF Board (CPFB) has put in place measures such as an automated system to detect employers who fail to meet the deadline for CPF payments each month.
MOM added that the CPFB conducts proactive audits targeted at employers in higher-risk industries and firms to check the accuracy of CPF paid by the employers, in addition to investigations on reports lodged by employees or whistle-blowers.
Reasons for late CPF payments
According to MOM, 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 may also have an incorrect 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," said MOM.
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Penalties for late CPF payments
The due date for employers to make CPF contributions is on the last day of the calendar month. The CPFB can impose penalties and take enforcement action against employers who fail to pay by the 14th of the following month (or the next working day if the 14th falls on a Saturday, Sunday or public holiday).
Penalties include late payment interest, composition amount, court fine, and imprisonment.
The CPFB charges late payment interest at 1.5 per cent per month, starting from the day after the due date, subject to a minimum amount of S$5.
The CPFB may also impose a composition amount of up to S$1,000 per offence to allow employers to settle the case out of court. Employers can only compound their CPF offences if they have paid up all outstanding CPF contributions and late payment interest.
Failure to pay all outstanding CPF contributions, late payment interest and any composition amount by the deadline will result in the CPFB commencing prosecution actions against such employers.
Employers who are convicted of offences under Section 58(1)(b) of the CPF Act will be liable for a court fine of between S$1,000 and S$5,000 per offence and/or up to six months' imprisonment for the first conviction. Subsequent convictions will result in a court fine of between S$2,000 and S$10,000 per offence and/or up to 12 months' imprisonment.
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