Singapore’s Parliament passed the Platform Workers Bill 2024 on 10th September 2024. This legislation will introduce a new category of workers: Platform Workers, for businesses offering on-demand delivery and ride-hailing services.
The bill intends to provide strengthened protections for platform workers in these areas:
- Housing and retirement adequacy through Central Provident Fund (CPF) contributions by both platform workers and platform operators.
- Financial compensation if they get injured during work.
- A legal framework for Platform Workers’ representation.
Effective 1st January 2025, Singapore’s ride-hailing drivers and delivery workers will be reclassified as a distinct labour class. The Ministry of Manpower (MOM) will work with platform operators and workers to ensure the implementation of these new protections, enhancing job security and benefits for this workforce.
Defining New Categories: Platform Operators and Platform Workers
The Ministry of Manpower (MOM) has described the nature of the relationship between Platform Workers and Operators to be unique and distinct as compared to employment and freelancing.
Platform Workers
Platform Workers are individuals working for businesses that offer platform services, such as ride-hailing or delivery services. They are defined as workers who:
- Have an agreement with a Platform Operator to provide services to platform users in Singapore, earning payment or benefits in return.
- Are subject to control by the Platform Operator, including task assignments and pay rates.
Platform workers will receive earning slips that specify their status as a platform worker.
Platform Operators
Platform Operators will also be categorised as a distinct group. They are defined as companies that:
- Have an agreement with users to provide services such as ride-hailing and delivery.
- Use data to automate decisions related to Platform Workers, such as task assignments and payment rates.
- Set rules, requirements, or restrictions for Platform Workers.
What are the Impacts of the Platform Workers Bill?
CPF Contributions for Housing and Retirement:
- Gradual Increase in CPF Rates: CPF Contribution rates for platform workers and operators will increase gradually over five years, increasing by up to 2.5% and 3.5% per annum respectively. These adjustments aim to align with employee levels and support housing and retirement savings.
- Mandatory Contributions Starting January 2025: CPF Contributions will be mandatory for platform workers born on or after 1 January 1995. Those born earlier can opt in permanently from November 2024.
- Monthly Deductions by Operators: Platform Operators will deduct and transmit CPF Contributions, split among the Ordinary, MediSave and Special Accounts. Operators will also cover MediSave contributions for those not opting in.
Work Injury Compensation – On-the-job protections
- Mandatory Work Injury Compensation (WIC) Insurance: Platform Operators must provide WIC insurance for Platform Workers, matching the coverage given to regular employees under the Work Injury Compensation Act (WICA).
- Protection Against Job-Related Injuries: This insurance requirement recognises that platform workers face significant on-the-job risks, ensuring they are compensated in case of work-related injuries.
Legal Framework for Representation of Platform Workers
- Establishing a Representation Framework: A legal framework will be created to allow platform workers to organise and advocate collectively, ensuring their voices are represented.
- Addressing the Employee Gap: Since platform workers are not considered traditional employees, this framework addresses the lack of existing legal representation, giving them a structured means to protect their interests.
Application of Fixed Expense Deduction Amount for Work Injury Compensation and CPF Contributions
- Fixed Expense Deduction for Net Earnings: A fixed expense deduction will be applied to platform workers’ gross earnings to calculate net earnings, simplifying the calculation for CPF contributions and WIC claims.
- Impact of Transportation Modes on Deductions: The fixed deduction amount will vary based on factors like the worker’s mode of transport, representing typical expenses for most platform workers. This adjusted net earnings figure will be used for CPF and WIC calculations.
Enhancing Protections for Platform Workers
The Platform Workers Act marks a transformative shift in protecting gig economy workers in Singapore. By introducing CPF contributions, injury compensation, and legal representation, it ensures financial security and fairness. Effective from January 2025, this legislation aligns platform work with established employment benefits, fostering equity and sustainability in the evolving labour landscape.
