100 employers caught making false CPF contributions to boost foreign worker quotas from 2024 to 2025
Errant employers face fines of up to S$20,000 per fraudulent work pass application and a ban on hiring foreign workers
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[SINGAPORE] About 100 employers have been hit with enforcement actions for fradulently inflating their foreign worker quotas through “phantom worker” arrangements between 2024 and 2025, Manpower Minister Tan See Leng said on Tuesday (Mar 3).
Dr Tan was responding to Workers’ Party MP Kenneth Tiong, who asked whether the Ministry of Manpower (MOM) has assessed the extent of quota circumventions through such schemes.
Phantom worker arrangements involve employers making false Central Provident Fund (CPF) contributions for locals who do not actually work, artificially boosting a firm’s foreign worker entitlement.
In a written response, Dr Tan said MOM investigates such arrangements based on complaints as well as proactive on-site checks, and these are what led to the enforcement actions against the errant employers.
In response to a separate parliamentary question last week, he said errant employers may be fined up to S$20,000 for every work pass application made using the inflated quota, and will be debarred from hiring foreign workers.
Phantom workers who actively collude with such errant employers may also face enforcement actions for abetting the offence.
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Dependency ratio ceilings
Tiong had also asked whether MOM would consider scrapping nationality-based quotas – known as Dependency Ratio Ceilings (DRCs) – in favour of a flat per-worker tax directed towards local upskilling.
Dr Tan rejected the proposal, adding that a purely price-based mechanism would be insufficient to control foreign workforce numbers.
He noted that reservation wages in neighbouring labour-supplying economies are substantially lower than resident non-PMET (professionals, managers, executives and technicians) wages in Singapore, meaning levies would have to rise significantly to achieve the same rationing effect as quotas.
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This will have knock-on consequences for business costs and Singapore’s competitiveness.
The DRC also serves a structural purpose, said Dr Tan, by tying a firm’s entitlement to hire foreign workers to the size of its local workforce.
This ensures that firms maintain a local core to access foreign manpower while deploying foreign workers in positions that few locals will take up.
It also enhances workforce resilience during disruptions such as the Covid-19 pandemic, said Dr Tan.
Nevertheless, the government has, over the years, tightened DRCs to take into account the scope for automation and localisation across different sectors.
This aims to nudge employers to reduce reliance on foreign manpower by increasing productivity and redesigning jobs to attract local workers, he said.
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