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The new Bill will boost protections for platform workers by mandating CPF contributions for housing and retirement, providing financial compensation for work-related injuries, and establishing a legal framework for worker representation.
The new Platform Workers Bill 2024 was passed in Singapore's Parliament on Tuesday (10 September 2024). This Bill seeks to enhance the rights and protections for Platform Workers in three areas — namely housing and retirement adequacy through Central Provident Fund (CPF) contributions by both platform operators and workers, financial compensation if they get injured while working, as well as a legal framework for representation.
In his speech at the second reading of the Bill on Monday, ahead of it being passed, Senior Minister of State for Manpower Dr Koh Poh Koon highlighted four key components of the Platform Workers Bill:
- The scope of entities, including companies, and workers covered under the Bill.
- measures to support the housing and retirement adequacy of platform workers through the CPF system. These involve amendments to the Central Provident Fund Act.
- measures to ensure financial protection of platform workers if they get injured at work, and to strengthen stakeholders’ responsibilities to prevent injuries. These involve amendments to the Work Injury Compensation Act and the Workplace Safety and Health Act.
- The legal framework for representation of platform workers. This involves amendments to the Industrial Relations Act.
Here is a breakdown on what these components entail:
The relationship between 'platform operators' and 'platform workers' is distinct from traditional employment and freelancing. The new Bill introduces a unique category of workers in addition to employees and the self-employed.
SMS Koh said: "Singapore is among the first in the world to take this approach of providing statutory protections for platform workers as a distinct group. This approach preserves the flexibility of platform work that both sides want, and achieves our aim of better protecting platform workers.
With the Bill being passed, companies that meet the definition of 'platform operator' will need to comply with their statutory obligations and provide protections to their platform workers once the Bill comes into effect. "The same applies to new companies, existing companies that change their business models later on, and companies in subcontracting arrangements if the company satisfies the definition of a platform operator vis-Ã -vis a worker", SMS Koh said.
To support companies, MOM will provide resources such as a checklist for companies to self-assess if they are platform operators. Tripartite partners will also engage the ground to educate companies and relevant workers.
SMS Koh stressed: "If we find out that the company is a platform operator, we will require the platform operator to pay any outstanding CPF contributions or work injury compensation owed to the worker, as we currently do with employers.
"Additionally, the platform operator may face penalties for not making CPF contributions or not providing work injury compensation in a timely manner for platform workers, and for failing to notify MOM that it is a platform operator."
CPF contribution for housing and retirement adequacy
CPF contribution rates for platform workers and platform operators will be gradually increased to match that for employees and employers.
From 2025, platform operators will contribute 3.5% of platform workers’ net earnings, and platform workers will contribute up to an additional 2.5%-pt. This will increase by the respective percentage quantum yearly until 2029. This will bring platform operators’ and workers’ CPF contribution rates to the same level as employers’ and employees’ contribution rates by 2029.
For platform workers in the ages of 55 to 65, the timing of the increase will be synchronised to the senior worker CPF contribution rate increases for employees in the same age group.
These increased contributions will be deposited into Platform Workers' Ordinary, Special, and MediSave Accounts monthly, helping them achieve similar housing and retirement adequacy as employees with comparable earnings. The increased CPF contributions will be mandatory for platform workers born on or after 1 January 1995.
This move is expected to benefit younger platform workers in the form of compounding interest, given their longer runway for accumulation, to meet their housing needs. Meanwhile, older platform workers can choose to opt in to the increased contributions starting November 2024. This choice is irreversible. Those who do not opt in will still make MediSave contributions but will not receive the platform operator’s share of CPF contributions.
"Overall, platform workers will experience an increase in their total earnings, after factoring in CPF contributions from platform operators. Nonetheless, I appreciate that some platform workers will be concerned about reduced take-home pay", SMS Koh commented. In tackling it, the Government will enhance the Platform Workers CPF Transition Support (PCTS), especially for those with lower incomes. The enhanced PCTS will offset 100% of the platform worker’s share of increase in CPF Ordinary and Special Account contributions in 2025. This means the Government will fully pay for the increase in Platform Workers’ CPF contributions in 2025.
The offset for 2026 will be increased to 75%, from the 50% offset earlier announced; before being tapered down gradually thereafter, and ceased in 2029.
In line with the above, the PCTS qualifying income cap will be increased from S$2,500 a month to S$3,000 a month, in line with the increase in the Workfare Income Supplement qualifying income cap from January 2025.
This aside, the Bill will also see enhancements made to Workfare for lower-income platform workers. From 2025, platform workers will receive Workfare payments monthly instead of annually, seeing that they will be making CPF contributions on a monthly basis. In addition, from 2029 onwards, platform workers who contribute CPF at the same level as employees will receive employee-level Workfare, instead of two-thirds the amount that self-employed workers do. This means that they will benefit from higher Workfare payments of up to S$4,900 a year, with a higher proportion paid in cash – 40%, instead of 10% today.
SMS Koh highlighted that amendments to the CPF Act will specify how the computation of CPF contributions for platform operators and workers will be aligned to the employer-employee model in terms of how it is tiered based on age and income, and applied to monthly earnings from each platform.
"However, unlike employees, platform workers incur work expenses which are not reimbursed, such as fuel cost. Hence the computation of CPF for platform workers will be based on earnings less a Fixed Expense Deduction Amount (FEDA)", he pointed out. More on this is shared below.
Work injury compensation to provide on-the-job protection
In the event a platform worker encounters any job-related injury, to ensure they receive adequate compensation during recovery, platform operators are required to provide Work Injury Compensation (WIC) insurance with coverage equivalent to that offered to employees under the Work Injury Compensation Act (WICA).
Both platform operators and platform workers will also have legal responsibilities to help prevent work-related safety incidents. Detailing what stage of work will be covered, SMS Koh shared: "Some platform workers take platform work as their main job and do this throughout the day, while others do so on a part-time or ad-hoc basis.
"As platform workers do not have fixed working hours or conventional workplaces, the circumstances under which platform workers will be eligible for work injury compensation will be more scoped, compared to employees."
To that effect, the work injury compensation regime needs to account for the unique features of platform work. SMS Koh explained: "In a typical day, a platform worker would log onto the platform app to wait for jobs, before accepting a suitable job. Then, the platform worker would set off to pick up the ride-hail passenger or the item to be delivered and complete the ride or delivery. Hence we can divide platform services broadly into three stages:
- Waiting for jobs
- Picking up goods or passengers
- Delivering and completion of tasks"
Thus, he shared: "Platform workers will be eligible for work injury compensation when they are performing pick-up and delivery of passengers or goods. These are the key activities that take place after a platform job has been accepted. Outside pick-up and delivery, platform workers can wait for jobs or pursue their own activities. It would not be fair to extend platform operators’ liability to activities which are not work-related."
Legal framework for representation of platform workers
Currently, trade unions can represent employees in negotiations with employers based on a legal framework where they must register and seek mandate to represent their employees. However, since platform workers are not classified as employees, no such legal framework exists for their representation. To address this, MOM will set up a legal representation framework for platform workers.
Under this framework, Platform Work Associations (PWAs) will be empowered to represent platform workers in negotiations with platform operators, similar to how trade unions represent employees. MOM will appoint Registrars to oversee and regulate PWAs.
To gain recognition, PWAs must apply to the Registry of PWAs for registration. Once registered, PWAs can represent and negotiate on behalf of platform workers if they obtain a mandate, either through recognition by a platform operator or a ballot among their members.
Fixed expense deduction amount for WIC and CPF contributions
To simplify WIC claims and CPF contributions, a Fixed Expense Deduction Amount (FEDA) will be used for all platform workers. This deduction will be subtracted from their gross earnings to determine their net earnings, which will then be used to calculate WIC compensation and CPF contributions.
The FEDA will vary based on the Platform Workers’ mode of transport and is designed to cover typical expenses for most workers. By using the FEDA, both Platform Workers and Platform Operators will avoid the hassle of manually tracking and calculating individual business expenses.
Commentary on the Bill
In a statement on Tuesday,, the National Trades Union Congress (NTUC) and its affiliated associations, National Taxi
Association (NTA), National Private Hire Vehicles Association (NPHVA) and National Delivery Champions Association (NDCA) said they welcomed and "strongly support" the Parliament’s passing of the Platform Workers Bill.
"The law paves the way for additional grievance resolution mechanisms for PWA members, including conciliation with the Ministry of Manpower and escalation to the Industrial Arbitration Court, when necessary. This structured system ensures that platform workers have access to fair dispute resolution depending on the severity of the issue", it was added.
NTUC Secretary-General Ng Chee Meng called this "a significant win for platform workers, and is an important milestone for NTUC’s work in championing their interests."
"Under the new law, platform workers can look forward to better earnings that will support their retirement and housing needs, as well as better protections to safeguard their safety at work."
He added: "NTUC and our affiliated associations will also have the legal backing to negotiate for better earnings, welfare and work prospects for our platform workers. We are committed to protecting and enhancing the livelihoods of platform workers, because Every Worker Matters."
Digital Platform Industry Association (DPIA) also responded on the passing of the Platform Workers Bill, noting that with Singapore being one of the first in the world to implement the platform worker legislation, this is a significant milestone for the industry.
DPIA members, the statement noted, have been collaborating closely with the government to design the necessary systems and workflows to enable CPF/Medisave contributions for platform workers, as well as to replicate this process with insurers. "Some aspects of the work injury insurance can only be finalised after the passing of the Bill, and members look forward to productive discussions with insurers."
Meanwhile, noting that the Bill aligns with members’ commitment to platform worker wellbeing, it will add significant costs to the industry. "The scale of the financial impact remains uncertain, as factors like the cost of work injury compensation insurance and the scale of CPF contributions remain unclear."
While the Government has acknowledged that the cost will fall on different parts of the community, going forward, DPIA encouraged each platform operator to carefully manage this increase in costs independently.
For more updates on provisions and initiatives targeted at platform workers, follow our coverage here.
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