Debated in Parliament on 9 Nov 2022.
Mr Gerald Giam Yean Song asked the Minister for Manpower for each year from 2013 to 2022 (a) how many reports has the Ministry received against employers that made CPF contributions to "phantom workers"; (b) what are the (i) median, (ii) lowest and (iii) highest administrative financial penalties imposed for such infringements; (c) what other penalties are imposed; (d) whether the Ministry plans to step up enforcement and increase penalties for such infringements; and (e) whether random spot checks are performed.
From 2015 to 2021, MOM received about 660 reports per year on firms inflating their foreign worker quota by making CPF contributions to locals who are not working for the firm, otherwise known as "phantom workers".
Administrative financial penalties were issued against 11 employers per year over this period. The median penalty was $15,000 and the penalties ranged from $1,250 to $200,000. Other enforcement actions taken included issuing cautions, directions to rectify breaches and debarment from hiring migrant workers.
MOM investigates all reports received and generates investigation leads through data analytics. We also conduct no-notice enforcement checks. We will continue to monitor the effectiveness of our measures and review them where necessary.
Mr Gerald Giam.
I thank the Minister of State for her answer. I have two supplementary questions.
When firms engage phantom workers or illegally recover costs from their foreign employees, they artificially inflate their firms' foreign worker quota and make foreigners cheaper to hire. This puts lower-income Singaporeans at a severe disadvantage, both in terms of landing jobs and bargaining for better salaries, and there is little incentive for workers to report this because they risk having their Work Permits cancelled. As a result, many of such offences may go undetected and unreported. So, my question is: can the Ministry conduct victimisation surveys of both local and foreign workers and employ more sophisticated intelligence gathering techniques to obtain a clearer picture of the extent of the problem and catch these offenders?
Secondly, I note that the Minister of State just said that of the 660 reports of phantom workers, there were only 11 penalties issued. This number of 11 seems very low, compared to the extent of the problem that is out there. Is there a reason for this gap between 660 and 11? And what is the reason why so few employers were taken to task for this?
I thank the Member for the two supplementary questions. On the first question, certainly, we will continue to look for ways, including conducting surveys and also giving reassurance to migrant workers to report and also to allow the detection capabilities to be improved.
Secondly, on why the number of employers who were found guilty seems to be relatively low compared to the number of reports made, it is actually the norm for a small proportion of complaints to be taken up for investigation. The complainants may not have the full facts, which are only surfaced upon investigation by MOM. We have to be fair to employers, too. So, we have to go deep into the facts and find evidence before we can take actions against employers. A complainant who sees a shop full of foreigners may not be aware that there are actually locals working backend or offsite. In such cases, there is no infringement committed and no enforcement action taken. In recent years, MOM has used data-mining capabilities to strengthen evidence gathering and enable MOM to take action against errant employers.
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