Platform worker protections: MPs concerned about costs of higher CPF contributions, discrimination by platforms
Top of MPs' minds was who would actually end up bearing the costs of stronger protections for platform workers – the workers, the platform companies or consumers.
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SINGAPORE: Lawmakers on Monday (Sep 9) raised concerns over who would bear the costs of higher Central Provident Fund (CPF) contributions and work injury compensation, and unfair discrimination against some platform workers should a landmark Bill aimed at protecting these workers be passed.
Under the proposed Platform Workers Bill, delivery riders, private-hire drivers and taxi drivers would get stronger labour protections from 2025.
MPs debated the Bill over more than four hours on Monday.
If passed, the law will, for the first time, identify platform workers as a new and distinct category of workers in Singapore, situating them between employees and self-employed people.
The Bill will provide platform workers with higher Central Provident Fund (CPF) contributions for housing and retirement adequacy, work injury compensation and representation in union-like associations.
Monday's debate also saw a sharp exchange between ruling party MPs and Mr Gerald Giam (WP-Aljunied) after he questioned the independence of the National Trades Union Congress (NTUC) and its effectiveness in advocating for workers.
The Bill defines platform workers as those with contracts to provide ride-hail or delivery services, and who are subject to the management control of platform operators.
Management control means that the platforms decide what tasks these workers are assigned and how much they are paid, among other work conditions.
The move entails amendments to a wide range of legislation, including the CPF Act, Work Injury Compensation Act, Workplace Safety and Health Act, and Industrial Relations Act.
The key provisions of the Bill are:
- Higher CPF contributions for platform workers, to gradually match those of salaried employees. This will be mandatory for platform workers aged 30 or younger in 2025, and optional for older workers. Currently, platform workers contribute up to 10.5 per cent of their income to MediSave (like self-employed persons), while platform operators do not give them CPF contributions.
- The Platform Workers CPF Transition Support scheme for eligible lower-income platform workers, to minimise the impact on their take-home pay after higher CPF contributions start. This support will gradually taper down from 2026 and end in 2029.
- Requiring platform operators to cover platform workers with workplace injury insurance at the same level as employees. This will include reimbursement of medical expenses, compensation of income loss from medical and hospitalisation leave, and lump-sum compensation for permanent incapacity or death.
- Legal duties for platform operators and platform workers to ensure workplace health and safety. A code of practice for platform services is currently open for public consultation through September.
- A legal framework for platform work associations to represent platform workers in negotiations with operators. NTUC has said it will form new platform work associations after the Bill passes.
Singapore will become one of the first countries in the world to provide statutory protections for platform workers as a distinct group from employees, with changes proposed under a new Bill. With the nature of platform work being “precarious”, support and protection for them will be strengthened in three areas. First, platform workers will be entitled to the same housing and retirement security as employees with the same income, through the CPF system. CPF contribution rates for platform operators and workers will be increased gradually over five years. Contribution will be mandatory for platform workers born from 1995 onwards and optional for those who are older. To ease concerns about take-home pay being affected, the Government is increasing the subsidy provided under the Platform Workers CPF Transition Support scheme. Second, platform operators will have to provide work injury compensation equivalent to what employees would receive. This includes medical expenses, income loss and one-time compensation for permanent incapacity or death. Third, a legal framework will be established allowing platform work associations to represent platform workers, similar to how unions represent employees. Senior Minister of State for Manpower Koh Poh Koon presented all the details in Parliament on Monday (Sep 9). He said the Bill, if passed, should take effect from 1 January 2025. For now, it covers ride-hail and delivery services which make up about 93 per cent of platform work. The need to cover other platform services may be considered in future reviews. Dr Koh said the changes will lead to an increase in business costs, which means consumers also have a role to play in paying “a little bit more”, and surveys have shown that many are prepared to do so.
WHY IT MATTERS
Singapore had about 70,000 platform workers in 2023, comprising about 3 per cent of the workforce. Around 93 per cent of platform work is in ride-hailing and delivery services.
Such work is precarious, Senior Minister of State for Manpower Koh Poh Koon told parliament.
Incomes fluctuate, he added, reaching a median of S$1,500 to S$2,500 a month last year. Dr Koh said workers run the risk of road accidents and have less control over their work compared to the self-employed.
The Bill is designed to give platform workers better workplace safety and retirement adequacy while stopping short of the full suite of employment rights, in order to preserve flexibility for workers and companies.
With this Bill, Singapore would become one of the first countries in the world to provide statutory protections for platform workers as a distinct group, Dr Koh said.
He said that the International Labour Organization has reached out to Singapore to understand the country's considerations and experiences in making the policy changes.
"This signals how important this issue is and shows that we are at the vanguard of developing innovative and sustainable ways to better protect these workers."
The Workers’ Party supports the Platform Workers Bill as it seeks to advance regulatory changes that will ultimately better serve the interests of platform workers by addressing their income- and health-related insecurities, Leader of the Opposition Pritam Singh said in Parliament on Monday (Sep 9). However, he said the success of the Bill for the Singaporean public will turn on how reasonable anticipated price rises of platform services will be, and whether the increase is equitably distributed between consumers, platforms and workers. Mr Singh asked if the Government has any forecasts on this, and whether platform companies will be expected to reveal how much of their price increases accrue to CPF and work injury compensation amendments. On CPF contributions, he questioned the choice of an opt in rather than opt out system for platform workers above 30, saying the latter would be far more effective in securing participation. The fears of platform workers about being worse off if they opt into CPF must also be addressed, he said - such as whether companies may extract the employers’ CPF contribution by adjusting workers’ payment algorithms, or assign more jobs to workers who do not make CPF contributions so as to lower their wage bill. He wanted to know how investigations will be carried out if there are allegations of malpractice or discrimination. Mr Singh also asked about the mechanics of work injury compensation for platform workers as well as the expectations workers ought to have of associations that will represent them, as envisaged by the Bill.
LAWMAKERS QUESTION WHO WILL BEAR COSTS
On Monday, MPs expressed support for the Bill but also had concerns about the impact of the increased contributions.
Top among their concerns was who would actually end up bearing the costs of higher CPF contributions and work injury compensation.
Platform operators, who currently do not make any contribution to platform workers’ CPF, will start contributing at a rate of 3.5 per cent of a worker’s net earnings from 2025.
Under the Bill, CPF contributions of both platform operators and workers will then gradually increase to match that of employers and employees.
In his opening speech, Dr Koh acknowledged that the changes would raise business costs and that consumers should be prepared to pay more to help protect platform workers.
But several MPs raised concerns that platform operators could end up extracting CPF contributions and work injury insurance coverage from workers’ earnings instead.
They also questioned how the government would ensure that costs would be fairly distributed among the platform operators, workers and consumers.
Leader of the Opposition Pritam Singh (WP-Aljunied) said the WP supported the Bill, but raised the prospect of platform companies "profiteering in the name of regulatory compliance".
He asked about the anticipated increase in prices on platform apps, and whether platform companies would be clear about the extent to which any price hikes could be attributed to the stronger worker protections.
TRUST, TRANSPARENCY IN PLATFORM APPS
Mr Singh and other MPs linked some of these issues to a lack of trust in platform apps and a lack of transparency in how job allocation and workers’ earnings are determined.
Platform workers' low trust of platforms can be attributed to the fact that many platform operators seem to be only making "half-hearted attempts" at issuing rate sheets and statements for jobs and earnings, and protocols for job allocation are also often vague, said Nominated MP Jean See.
Glitches that disrupt operators' apps – sometimes for extended periods – have also contributed to this low level of trust.
"Whenever such situations happen, platform workers are forced to double-up as platform operators’ helpdesk in facing angry customers and merchants while trying but often failing to get help from operators," said Ms See, who is the director of NTUC's Freelancers and Self-Employed Unit.
Platform workers also worry about digital disruptions undermining their livelihoods, she added.
Ms See called for platform operators to be held accountable for the integrity of app transactions and the knock-on impact of app disruptions on platform workers’ livelihoods.
She recommended that platform operators be required to provide income protection for active platform workers who lose the opportunity to earn during extended platform app outages.
DISCRIMINATION, PROTECTION AGAINST ABUSE
Another concern raised by several MPs was discrimination against workers who are mandated or opt in to the increased CPF contributions.
Mr Singh said platform workers who want to opt in to higher CPF contributions fear that platforms - to lower business costs - will start assigning more jobs to workers who do not opt in.
Similarly, Associate Professor Jamus Lim (WP-Sengkang) said platform companies may tweak their algorithms to deprioritise job allocations for those who are contributing more to CPF, or choose to "blatantly reduce" the salaries of those who opt in.
He acknowledged that younger platform workers may benefit the most from the increased CPF contributions by starting to save for their retirement early.
However, this may inadvertently lead to discrimination against their hiring as they are now "more costly", noted Assoc Prof Lim.
Non-Constituency MP Leong Mun Wai from the Progress Singapore Party added that there are insufficient protections to prevent platform workers who opt in for higher CPF contributions from being discriminated against.
Some MPs also called for platform workers to be protected against abuse.
Ms Joan Pereira (PAP-Tanjong Pagar) said the verbal abuse platform workers have to bear can affect them emotionally or even financially.
"(They) may be given bad reviews even though they are not at fault or for situations beyond their control," she said.
The debate for the Platform Workers Bill continues on Tuesday.
