Recession risk raises urgency to grant gig workers CPF, full benefits

THE rising cost of living is weighing on the economically vulnerable. Without the same job and benefits protections as employees, gig workers could be hit especially hard.

Those who rely on online aggregation platforms for work – driving taxis or private-hire vehicles, or doing on-demand delivery – deserve the same protections as employees. A good place to start: contributions to the Central Provident Fund (CPF) savings scheme, sufficient work injury protection and unionisation.

Having recognised the precarious position of these “platform workers”, Singapore has spent the past year studying how to better safeguard them. The committee tasked with the review is set to announce its recommendations in the next month or two.

Some observers expect CPF contributions could be made mandatory, but possibly at a lower rate. The committee is also looking into the expansion of the Work Injury Compensation Act (Wica) to these workers. And a separate workgroup has been set up to look into collective representation.

The various discussions have made it clear that a segment of these platform workers has an employee-like relationship with the platforms, but has been shortchanged of the full range of benefits they deserve.

There are no exact numbers for how big this segment is, but those in it are worth protecting. These workers put in the hours equivalent to those for a full-time job and are at constant risk of injuries while on the roads.

The platforms have rolled out initiatives of their own to improve rider welfare. Grab, foodpanda and Deliveroo have, for instance, formed their own industry association to provide upskilling opportunities and strengthen safety standards.

But these efforts cannot match the level of protection afforded under schemes like the Wica, which provides a minimum compensation of S$76,000 for the accidental death of an employee. For comparison, Gojek’s coverage is only S$15,000.

Meanwhile, CPF, the national savings scheme, is an essential pillar supporting the affordability of public housing and the building up of retirement funds in Singapore. Platform workers should not be excluded from it.

Of course, the counter-argument to this is that not all platform workers have employee-like attributes. Some engage in it as a side hustle, for the additional income, or even as a hobby. Platforms have emphasised that their workers – or “partners” as they are often called – value flexibility.

Yet, this does not mean that platform workers should universally be deprived of fundamental job protections. Surely some parameters can be set such that those with employee-like attributes – based on the hours worked or otherwise – can be treated as employees, rather than independent contractors.

A potentially useful definition of those who should be treated as employees is being debated in the United States. The administration of US President Joe Biden on Tuesday proposed a new rule that could grant gig workers the same rights as full-fledged employees.

The proposal mandates that when workers are “economically dependent” on a company, they are entitled to more benefits and legal protections than contractors. The country is kickstarting a 45-day public comment period, following which the final rule is expected next year.

Such moves are doubtless painful for companies and bound to rattle investors. Shares of gig economy giants Uber, Lyft and DoorDash tumbled over 10 per cent after the announcement.

Singapore’s gig economy companies will have to bear heavier costs with greater job protections, and could see their share prices fall as well. The risks are real: with higher costs, they may become constrained in how many they can hire here.

There could even be a backlash against the regulators and a hit to Singapore’s business-friendly image.

Yet, any pro-business policies should not come at the cost of critical job protections for the vulnerable; and particularly so at this time of heightened uncertainty.

The International Monetary Fund on Tuesday warned that the worst is yet to come for the global economy, and cut its forecast for global growth.

In the face of a looming economic storm, this is a bullet worth biting sooner than later.