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Employers who abuse Jobs Support Scheme face fines, jail: Taxman

Employers who abuse Jobs Support Scheme face fines, jail: Taxman

Source: Straits Times
Article Date: 04 Jun 2020
Author: Grace Ho

Iras reminded employers to ensure the correct amounts of CPF contributions have been made.

The taxman has warned employers who abuse the Jobs Support Scheme (JSS) to obtain higher payouts that they would be charged under the Penal Code and face up to 10 years' imprisonment and a fine.

The Inland Revenue Authority of Singapore (Iras) also said yesterday it was aware of possible abuses by employers to get higher payouts.

"It is vital that employers contribute the right amount of CPF (Central Provident Fund) for bona fide employees based on the actual wages paid," it said. "(Such abuse) is dishonest and is unfair to the employees, other employers and society at large."

The scheme pays out 75 per cent of wages for April and May on the first $4,600 of a worker's gross monthly pay, and at least 25 per cent for a further eight months for specified sectors. Under the Fortitude Budget announced last month, the JSS was extended to 10 months, up from nine, with more firms receiving higher tiers of support.

Some unacceptable practices cited by Iras include:

• Making purported mandatory CPF contributions for non-genuine employees;

• Continuing purported CPF contributions for employees who have been retrenched or put on no-pay leave;

• Maintaining purported CPF contribution amounts based on past wages for employees who have suffered wage cuts;

• Increasing purported CPF contributions for employees without any actual wage increase;

• Inflating purported CPF contributions and deducting these excess contributions from employees' wages in cash; and

• Artificially splitting the wages of employees across multiple related business entities to overcome the salary limit for the JSS payout.

Iras reminded employers to ensure the correct amounts of CPF contributions for the months of February, March and April have been made, saying: "Employers are also to ensure that the amount of mandatory CPF contributions in subsequent months is accurate so that they receive the right amounts of JSS payout."

Iras is using data from multiple sources to identify risks, and has set up a team to prevent and detect abuses. As part of these efforts, Iras may write to employers asking them to conduct self-reviews, and to provide declarations or documents to prove their eligibility for payouts.

"The JSS payouts will be made only after these employers have submitted their declarations and verification done by Iras," it said.

It also noted the penalties are severe, including being charged under Section 420 of the Penal Code and facing up to 10 years' imprisonment and a fine.

Employers who have made incorrect mandatory CPF contributions to their employees and who would like to declare their errors may do so at go.gov.sg/jssreview. They will also need to rectify the errors via the CPF Online Application service by June 30. No action will be taken against them provided the disclosure is accurate and complete.

Businesses or individuals who wish to report potential abuses of the JSS to Iras, may send an e-mail to [email protected] or report online at go.gov.sg/jssreport.


Examples of abuse

Making mandatory CPF contributions for non-genuine employees

Employers should not make mandatory CPF contributions to individuals who are not their real employees. Those who provide personal information to employers to facilitate such abuse may be held criminally liable.

Continuing mandatory CPF contributions for employees who have been retrenched or put on no-pay leave

Employers should stop making mandatory contributions for such employees. But they can continue to make voluntary contributions to the CPF accounts of employees on no-pay leave, by applying for a separate CPF submission number with CPF Board.

Maintaining mandatory CPF contribution amounts based on past wages for employees whose wages had been cut

Mandatory CPF contributions are based on employees' wages, age and citizenship. A wage cut should see a corresponding decrease in CPF contributions.

Increasing CPF contributions for employees whose actual wages have not gone up

Mandatory CPF contributions are based on employees' wages, age and citizenship. The prevailing contribution rates can be found on the CPF website.

Inflating mandatory CPF contributions and deducting the excess contributions from employees' wages in cash

Employers should make only the correct amount of mandatory CPF contributions based on actual wages paid.

Artificially splitting wages of employees across multiple related business entities

Employers should make only mandatory CPF contributions to employees for the business entities they are working for, and not artificially split wages across related business entities to circumvent the $4,600 salary ceiling.

Grace Ho


3 workplaces told to shut for insisting staff return to office

Three workplaces were forced to stop operations for failing to implement adequate safe management measures, including instructing employees to return to the office instead of allowing them to work from home, said the Ministry of Manpower (MOM) yesterday evening.

A total of 14 composition fines were also issued to employers for breaching various safe management measures in the two days following the end of the circuit breaker period on Monday.

As of 5pm yesterday, the ministry had inspected over 200 workplaces in islandwide enforcement operations, it said in a Facebook post.

Mr Silas Sng, divisional director of the occupational safety and health division at MOM, said: "It is understandable that some employers may be eager to bring their employees back to work in the office after two months of circuit breaker.

"However, we would like to remind employees that working from home must remain the default working arrangement for employees who are able to do so."

Employers will be asked to explain their actions, when employees complain to MOM that they had been asked to return to the workplace or office, despite being able to continue working from home, added the Facebook post.

If these employers are unable to provide a reasonable explanation, MOM will have to take enforcement action accordingly, in order to protect the employees, it said.

According to the ministry's guidelines, working from home should remain the default option for all employees. Workers can return to the workplace following the circuit breaker period only if they have no alternative, in order to use specialised equipment or fulfil legal requirements.

Yet, some workers told The Straits Times they had been told to return to their offices from Tuesday, despite it being unnecessary.

An engineer in the manufacturing industry was asked to return to his office this week to clear administrative tasks which he said could be completed at home.

He and his colleagues are allowed to work from home only one day per week, starting next week, said the engineer, who is in his late 20s.

"The reason that I was given by my employer was that the company can resume operations from June 2. But I am concerned that this is against the rules," he said, noting that he is also worried about holding physical meetings with his mostly middle-aged colleagues.

A graphics artist in the publishing industry also lamented the fact that she had been ordered to return to the office, even though she can access all the necessary imaging and editing programs on her computer at home.

She is unsure why she has to be in the office, she said.

"I feel that it is not very safe to have the entire company back at the same time. I am worried that I could fall sick or get infected by the virus," she said.

Another woman who works in the legal sector said the partners at her firm are providing the option for employees to return to the office should they feel comfortable to do so, which she prefers, even though she can get her work done at home.

"It is much easier to get things done with the team in person. The firm has safe distancing measures in place. If anything, my concern is taking public transport," said the woman, who is in her mid-20s.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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