In this series, business correspondent Timothy Goh offers practical answers to candid questions on navigating workplace challenges and getting ahead in your career. Get more tips by signing up to The Straits Times’ Headstart newsletter.
What recourse do employees have if their CPF contributions are late or unpaid?
Employees should first verify whether their CPF contributions have been credited by checking their CPF statements through CPF online services, said Amarjit Kaur, head of employment law at Withers KhattarWong.
If contributions are missing or have been paid late, employees should raise the issue directly with their employer and seek clarification on when payment will be made.
“The CPF Board expressly recognises employees’ right to ask their employers about non-payment or late payment of CPF contributions,” said Kaur.
Employees should first try to resolve the issue amicably with their employer.
However, where there are concerns about persistent non-payment or underpayment, employees can lodge a report with the CPF Board.
The board may investigate allegations of late payment, non-payment or underpayment of CPF contributions, Kaur said.
“In terms of recourse, the CPF Board has significant enforcement powers under the Central Provident Fund Act 1953,” she added.
It may require employers to pay all outstanding CPF contributions together with late payment interest and other penalties.
Late payment interest may be charged at 1.5 per cent a month from the day after the due date, subject to a minimum of $5.
A composition amount of up to $1,000 per offence may also be imposed to allow employers to settle their CPF offences out of court.
Employers can compound their offences only after paying all outstanding CPF contributions and late payment interest, Kaur said.
The CPF Board may also conduct inspections, require documents to be produced, interview employees and employers, and start prosecution proceedings against non-compliant employers.
“If an employer fails to comply, the CPF Board may take court action to recover the outstanding amounts, and the employer may face fines, imprisonment, or both,” said Kaur.
Because the CPF Board takes the lead in enforcing compliance and recovering unpaid contributions, Kaur advised employees to retain records such as payslips, employment contracts, salary payment records and correspondence with their employer as these may assist the CPF Board in its investigations.
“While delayed CPF contributions can have practical consequences for employees, particularly where CPF savings are required for housing or healthcare purposes, the regulatory framework is designed to ensure that employers remain responsible for making the required contributions, and enforcement action can be taken where the employers fail to do so,” said Kaur.
Shirley Loo, director of industrial relations and analysis at the National Trades Union Congress, said that where there is an ongoing employment dispute involving matters such as salary arrears, wrongful dismissal claims or related CPF contributions, employees should first approach the Tripartite Alliance for Dispute Management to resolve claims related to their salary.
“Once the claim has been concluded and a settlement agreement has been reached, the CPF Board will assess and compute the CPF contributions based on the wages determined to be due and payable under the settlement,” she said.
