Impact of exemption of CPF of foreign workers on the management of companies in Singapore.

• Main Authors: Chua, Ling Hong., Ho, Shin Yang., Lim, Chin Kin.
• Other Authors: Nanyang Business School
• Format: Final Year Project
• Language: English
• Published: 2013
• Subjects: DRNTU::Business::Accounting
• Online Access: http://hdl.handle.net/10356/51152
• Institution: Nanyang Technological University

With effect from 1 August 1995, employers will not be required to pay Central Provident Fund (CPF) contributions for new expatriate employees on employment and professional visit pass. Employers will continue to pay CPF contributions for existing foreign employees until their passes or permits expire. They will not need to contribute to CPF after they renew their passes or permits. . Presently, foreign workers constitute a significant 20 percent of the Singapore labour force, out ofwhich 10 percent of them are foreign professionals who are affected by this change. Following the present trend, there will be an increasing demand and need for these foreign professionals as Singapore strives to become the regional centre in the Asia-Pacific region in the 21st century. The team investigated whether this recent change in CPF policy would have a major impact on the competitiveness of Singapore on both the national as well asthe corporate level. This is especially important for a country facing a serious shortage in local manpower such as Singapore, and thus have to rely on the import of foreign workers to fill up the gap. The report looked at the impact of the new ruling on organisations" compensation, recruitment, promotion and training policies, as well as the impact on affected employees' morale and productivity. The report also covered issues concerning affectedforeign workers' tax burdens, permanent residence, labour cost, possible rationales of government's intention behind the change, and last but not least, other implications that may arise in the long run. -