Why do some companies pay bogus senior employees?

[Beehive3783]

Bro & Sis,

The Auntie gets money without working.

My point is - if the money is gone, will the Auntie's livelihood be affected ?

How can we secure that money for Aunite and at the same time report the unethical practices ?

What is there to secure? I'm sorry if i'm wrong here since the details are not revealed, but the money was never hers in the first place

[Kusje]

Yah, MOM too. I think I will report to CPF and MOM. This has been going on for 2 years. Just recently found out from Auntie A. Sigh...

 

Depending on your morals, I would advice you not to listen to these people and report the company. Your auntie and uncles are both parties involved in the scam and they can be implicated in any investigation.

 

Best thing to do is to "resign" immediately and hope nothing comes out of it.

 

TINLA.

Edited March 1, 2010 by Kusje

[Damienic]

I think TS is contemplating to 大义灭亲。

[Fcw75]

Phantom worker.

[Acieed]

This is one of the main reasons why we see so many FT in all kinds of industries, even when the policies are suppose to regulate their employment here.

 

[Ender]

Also gives the false illusion that many sgreans has employment.

[Ace]

Hi all bros and sis.

 

I am actually trying to find out why some companies will resort to such acts. The scenario is given below:

 

Auntie A has not been working for quite some years. Her relative asked her to pass her her NRIC card to apply for some "incentives" government is giving to senior citizen.

 

Auntie A started to receive $5+ from company X in CPF monthly contributions and get the checks from CPF for the Workfare something scheme.

 

Auntie A never worked for company X.

 

What benefits does company X have to make Auntie A a bogus employee?

 

- Evade tax?

 

i can't really find this online. please assist.

 

this is obviously against the law.

 

but thinking a bit more in depth.

 

It is a win win for all

1)The employer get to hire more FT.

2)Auntie get money for being in the payroll and yet doing nothing and on top of that I believe

auntie will get workfare payout from govt as well

3)Govt is happy to close one eye. Since this make the employers happy as they are allowed to bring in more FT. More importantly. the govt can report the employment as low %.

 

[Watwheels]

I suggest TS look into the Aunt's CPF summary first.

 

Since the company officially hires TS's aunts & uncles, there must be some kind of monthly CPF contributions paid by the company to these folks. If these folks dun need to work there but still get contributions from the company means they get paid monthly but into their CPF account only but maybe no salary, I dunno. In other words, they are getting smth in return from the relative son so that(like someone suggested) he can hire more foreign workers.

 

If TS were to bao toh the relative son the aunts and uncles will get implicated as well if the authorities find out all are family related. There's a possibility all might get fine or jail or both. TS might not be doing her aunt a favour but might get her into deep sh*t.

 

IMO the relative son is forking out more $$ so that he can get around the foreign worker quota. In terms of tax breaks there's no chance of evading, in fact he is going to pay more for the newly revised foreign worker levy. What he's doing is nothing compared to the fanthom workers in the F&B and constructions sectors which go by the hundreds.

 

What SME like the above scenario faces is common. Cos a lot of the jobs, locals won't want to choose. Long working hours, low pay and no prospect. What other choice do these employers have? With the recent quota cut it makes things a lot harder.

 

TS better think twice cos if the company is forced to close shop, the sgporeans in the company will also loose their jobs too. You become the executioner. Dun be surprised to get spat on and hated by your relatives as well.

Edited March 1, 2010 by Watwheels

[Arowana1]

Hi all bros and sis.

 

I am actually trying to find out why some companies will resort to such acts. The scenario is given below:

 

Auntie A has not been working for quite some years. Her relative asked her to pass her her NRIC card to apply for some "incentives" government is giving to senior citizen.

 

Auntie A started to receive $5+ from company X in CPF monthly contributions and get the checks from CPF for the Workfare something scheme.

 

Auntie A never worked for company X.

 

What benefits does company X have to make Auntie A a bogus employee?

 

- Evade tax?

 

i can't really find this online. please assist.

 

to register auntie a as local employee of company so that company can hire more ft aka fw as there is a ratio to comply with. btw, company AND auntie a will get into trouble so tink carefully before u do anything.

[Thugstercena]

scarly is old town white coffee? hahaha!

[Joycechua]

Why did Auntie A tell you all this?? Iam surprised she did. Given this is something not very ethical, by right she would as much as possible not reveal anything which can land her in trouble..

 

Auntie A tot it is government giving her some $$$. I think she doesn't know what has happened. The relative is very very unethical to mislead the old gullible and illiterate seniors. I was so so pissed.

[Joycechua]

Bro & Sis,

The Auntie gets money without working.

My point is - if the money is gone, will the Auntie's livelihood be affected ?

How can we secure that money for Aunite and at the same time report the unethical practices ?

 

The thing is this is extra cash. My aunties and uncle are supported by their children. I think aunties and uncle were too naive to think government giving them extra $$$ becos' they are old. :( They don't really need this extra cash

[Kusje]

Auntie A tot it is government giving her some $$$. I think she doesn't know what has happened. The relative is very very unethical to mislead the old gullible and illiterate seniors. I was so so pissed.

Ignorantia juris non excusat

[Joycechua]

Since the company officially hires TS's aunts & uncles, there must be some kind of monthly CPF contributions paid by the company to these folks. If these folks dun need to work there but still get contributions from the company means they get paid monthly but into their CPF account only but maybe no salary, I dunno. In other words, they are getting smth in return from the relative son so that(like someone suggested) he can hire more foreign workers.

 

If TS were to bao toh the relative son the aunts and uncles will get implicated as well if the authorities find out all are family related. There's a possibility all might get fine or jail or both. TS might not be doing her aunt a favour but might get her into deep sh*t.

 

TS better think twice cos if the company is forced to close shop, the sgporeans in the company will also loose their jobs too. You become the executioner. Dun be surprised to get spat on and hated by your relatives as well.

 

I think no choice but to report. The concerned company is not doing anything to remove their names. I rather they get fined and learn the lesson. Afterall, they are illiterate and gullible. Think government won't be too hard on these very old people. I want the company to be punished. The fact that they cheated these old folks to believing that this is legal and government is giving them extra $$$ for the fact that they are old.

 

I like to warn all those who have illiterate old relatives. Please help them to check their CPF statements so that they won't be used in such scams. Afterall, the culprit is that greedy relative and his wife who wanted to evade tax and gain much profits in Company X.

[Tedlhw]

I think no choice but to report. The concerned company is not doing anything to remove their names. I rather they get fined and learn the lesson. Afterall, they are illiterate and gullible. Think government won't be too hard on these very old people. I want the company to be punished. The fact that they cheated these old folks to believing that this is legal and government is giving them extra $$$ for the fact that they are old.

 

I like to warn all those who have illiterate old relatives. Please help them to check their CPF statements so that they won't be used in such scams. Afterall, the culprit is that greedy relative and his wife who wanted to evade tax and gain much profits in Company X.

 

You'll be screwing ALL your relatives at one shot.

Send them all to jail or get fined. Big CNY gift for them.

But maybe good for you, save on angbao next year....Nobody to visit, all in jail

 

"Under the Employment of Foreign Manpower Act, inflating the foreign-worker entitlement by falsely declaring the number of local workers is punishable with a fine of up to $15,000 or 12 months' imprisonment, or both.

 

Besides the employer, the 'phantom' worker may also face the same penalty for abetting the offence."

 

See full article below.

 

The following article appeared in the Straits Times on 22 Feb 09.

 

Singapore's PHANTOM WORKERS

By Shuli Sudderuddin

22 February 2009

Straits Times

 

Their names are on the payroll and payouts are made to their CPF accounts - but they don't work. Errant employers use this scam to get around a quota system for hiring cheaper foreign labour

 

Mrs Josephine Teo, an MP for Bishan-Toa Payoh GRC, recently met a retired woman in her 60s at her Meet-the-People session.

 

'She wasn't working but discovered that money had been deposited in her CPF account,' she said.

 

The woman was puzzled about this and brought it up to the MP.

 

'We alerted the Ministry of Manpower and found that someone knew of her identification and employment status and submitted an application to hire her,' said MrsTeo.

 

Meet the 'phantom' worker.

 

Under the law, sectors such as service and manufacturing must employ a number of Singaporeans or permanent residents before they can hire foreign workers.

 

Some employers get around this by employing local workers in name only and contributing to their CPF. Having these phantom workers, who are often retirees, on their payroll allows them to hire more foreign workers.

 

Phantom workers made the news recently when Mr Ong Ah Heng, Nee Soon Central MP, drew Parliament's attention to their existence.

 

He was approached by a coffee shop owner who felt that errant coffee shop operators would benefit unfairly from the Jobs Credit scheme announced in Parliament.

 

Under the $4.5 billion scheme which is meant to stave off retrenchments, employers get a 12 per cent cash grant on the first $2,500 of wages for every Singaporean or permanent resident on their CPF payroll.

 

'People fear that the scheme is going to be put to waste because money is going to go to people who aren't actually paying local workers,' Mr Ong said to The Sunday Times.

 

Under the Employment of Foreign Manpower Act, inflating the foreign-worker entitlement by falsely declaring the number of local workers is punishable with a fine of up to $15,000 or 12 months' imprisonment, or both.

 

Besides the employer, the 'phantom' worker may also face the same penalty for abetting the offence.

 

Internationally, phantom workers have also been in the spotlight.

 

Last month, B. Ramalinga Raju, the founder and chairman of Satyam, an Indian information service outsourcing company, confessed to making up more than 10,000 employees to siphon money from the company.

 

While the Ministry of Manpower (MOM) is currently investigating 33 cases of possible use of phantom workers, some say the problem may be more widespread.

 

Mr Ong said: 'I think the problem is bigger than that because coffee shops seem to have many foreign workers.'

 

Added a coffee shop manager in Ang Mo Kio who declined to be named: 'This is something many operators learn when they set up a coffee shop. They do it because it's convenient.'

 

Rampant practice

 

Industry players said the phenomenon is not new.

 

Mr Hong Poh Hin, vice-chairman of the Foochow Coffee Restaurant and Bar Merchants Association, knows of restaurant operators who have been caught for this, although he said he has not encountered this in the 400 or so coffee shops in his association.

 

Explaining how it works, he said employers usually put down the names of local retirees as workers. However, these retirees do not work in the establishment, nor do they get a salary.

 

In some cases, they might not even know about the scam. Some of them could be unwitting family members of the employers.

 

As required by law, the employers pay a portion of these phantom workers' salaries into their CPF accounts. They then use their names to fulfil the quota of local workers that is required.

 

One reason for the scam is cost - it is much cheaper to get foreign workers than local ones.

 

'Locals are paid about $1,100 to $1,200 while foreigners are paid only $800 to $900,' said Mr Hong.

 

'Even if employers pay three locals $60 each for CPF, they will still make a small saving and the foreigners will work longer hours,' he said.

 

Labour agents like Mr William Tan, the licensee for Foreign Recruitment Centre, said unlicensed agents are often responsible for phantom workers.

 

'Employers need labour so they sometimes advise them to do this,' he said.

 

Assistant Professor Cheolsung Park at the National University of Singapore's department of economics said that while the practice is not that widespread, phantom workers are used to cut costs.

 

'They are cheaper and particularly in the recession, employers will want to save.'

 

Singaporean engineering student Luo Yong Hui, 24, observed the scam at work when he did a stint as a production operator in a factory in Tuas during his school holidays about a year ago.

 

He was told by foreign workers there that the employers were using locals to give a false headcount.

 

'The staff comprised about 80 per cent foreigners. The foreign workers earned about $400 a month while the locals earned almost twice this amount,' he said.

 

'So even after providing CPF to phantom workers, the employers still saved money.'

 

Employers who play by the rules say errant operators have an unfair advantage over them, particularly now that there is the Jobs Credit scheme.

 

Mr Lim Leong Tarn, 62, who is in charge of the Yishun Ring Road Eating House coffee shop, said he hires only local workers.

 

'It isn't fair. The Government may not check when giving out Jobs Credit. As long as the supposed employees fulfil certain criteria, they'll just give out money,' he said.

 

An MOM spokesman said that companies submitting work permit applications for foreign workers have to declare the number of local employees that are employed by them and that CPF contributions are made to these employees.

 

'MOM has in place processes to flag unusual company profiles, which may indicate the existence of 'phantom' workers,' he said.

 

'On-site checks are also made at companies to ascertain if the employees are working for the company.'

 

He added that the cases identified by MOM and currently under investigation include coffee shops, freight forwarders, construction firms and others.

 

A spokesman for the Ministry of Finance added, in reference to the Jobs Credit scheme: 'In any scheme, there is a possibility of abuse.'

 

It will work closely with the Inland Revenue Authority of Singapore and the CPF Board which are administering the scheme to ensure that abuse is minimised, he said.

 

Quota system

 

Industry players say the phantom workers phenomenon is also the result of the foreign worker quota scheme as well as the unwillingness of locals to work in certain jobs.

 

For example, for every local worker employed, the construction sector can hire seven foreign workers; the marine sector, five; and service and landscaping sector, one.

 

Mr Bob Tan, general manager of A-Star Food Court, said that it can be difficult to hire local workers and government quotas may need to be revised.

 

'With the current system, employers may have difficulty employing workers. Some may not have enough local headcount and consequently not even be able to hire foreign workers,' he said.

 

Then again, Singaporeans - especially younger ones - may not want the jobs offered.

 

A spokesman for Start Point Employment Services said that local workers are picky about jobs and often quit easily.

 

'When you hire foreign workers, you have more control and their employment is more stable. Employers may have no choice but to turn to foreigners,' she said.

 

Some suggested reviewing the quotas currently in place and training local workers.

 

Said Dr Park: 'Quotas create problems because they create artificial barriers and people will find ways around them. What we should focus on is giving local workers a competitive advantage by improving their skills.'

 

Others advocate strong enforcement of the existing rules.

 

Said MP Josephine Teo: 'Once there is clear indication that MOM is actively enforcing the rules, awareness will rise and employers will realise the consequences of flouting the law.'

 

Still, some see a bright side to all this.

 

Mrs Teo said that the Jobs Credit scheme might end up giving older Singaporean workers an advantage.

 

She explained: 'Employers need not pay as much CPF for older workers, and with the Jobs Credit scheme, it may be cheaper for employers to just hire locals. Hopefully, this will tilt the balance in their favour.'

 

No easy task keeping within foreign worker quota

22 February 2009

 

It strives to maintain the quota but it is no easy task.

 

The Must Eat coffee shop in Toa Payoh Central has three workers from China and three workers from Malaysia out of its 12 employees there.

 

This is within the quota for the service industry, where up to 50 per cent of the company's workforce can be foreign workers.

 

But Ms Chuang Yu Ming, 46, the coffee shop supervisor, said that it can be a challenge to maintain the quota constantly.

 

Her chief problem? Getting Singaporeans to work at the coffee shop.

 

While Singaporeans can relate better to customers, they are 'hard to hire because they can be very picky. They don't want to do overtime or wash dishes sometimes, and they have too many demands', she said.

 

Foreign workers, on the other hand, tend to take fewer days off and are diligent.

 

Like other coffee shop operators The Sunday Times spoke to, she said she understood why operators may be forced to hire phantom workers, but said that it was unfair to those coffee shop operators who do not break the law.

 

'The rules are made for a reason and the Government must have put a lot of consideration into them, and it's not fair that other operators benefit from flouting them,' she said.

 

She tries her best to recruit more Singaporeans by reminding them not to turn down work at a coffee shop so easily.

 

'I tell them to add value to their skills and tell them that if they are willing to do work, they need not worry about finding a job.'

 

On local hires

 

'They don't want to do overtime or wash dishes sometimes, and they have too many demands.'MS CHUANG YU MING, Must Eat coffee shop supervisor

 

© 2009 Singapore Press Holdings Limited

 

[Galantspeedz]

what mustank say is right, it is to meet the local quota in order to hire foreign employees......

[Galantspeedz]

I think no choice but to report. The concerned company is not doing anything to remove their names. I rather they get fined and learn the lesson. Afterall, they are illiterate and gullible. Think government won't be too hard on these very old people. I want the company to be punished. The fact that they cheated these old folks to believing that this is legal and government is giving them extra $$$ for the fact that they are old.

 

I like to warn all those who have illiterate old relatives. Please help them to check their CPF statements so that they won't be used in such scams. Afterall, the culprit is that greedy relative and his wife who wanted to evade tax and gain much profits in Company X.

 

it is a win win situation and is in no way a scam..... nothing to do with evade tax lar..... wah lau.....

[Joycechua]

You'll be screwing ALL your relatives at one shot.

Send them all to jail or get fined. Big CNY gift for them.

But maybe good for you, save on angbao next year....Nobody to visit, all in jail

 

"Under the Employment of Foreign Manpower Act, inflating the foreign-worker entitlement by falsely declaring the number of local workers is punishable with a fine of up to $15,000 or 12 months' imprisonment, or both.

 

Besides the employer, the 'phantom' worker may also face the same penalty for abetting the offence."

 

See full article below.

 

The following article appeared in the Straits Times on 22 Feb 09.

 

Singapore's PHANTOM WORKERS

By Shuli Sudderuddin

22 February 2009

Straits Times

 

Their names are on the payroll and payouts are made to their CPF accounts - but they don't work. Errant employers use this scam to get around a quota system for hiring cheaper foreign labour

 

Mrs Josephine Teo, an MP for Bishan-Toa Payoh GRC, recently met a retired woman in her 60s at her Meet-the-People session.

 

'She wasn't working but discovered that money had been deposited in her CPF account,' she said.

 

 

......