The Platform Workers Act (“the act”), taking effect Jan. 1, 2025, will be a game changer in Singapore’s labor landscape. It marks a significant step toward recognizing the unique circumstances of platform workers and providing them with essential protections. As one of the first countries to establish specific safeguards for this growing workforce, Singapore is demonstrating its commitment to adapting labor laws to the evolving digital economy.
Understanding Platform Workers and Platform Operators
The act defines “platform workers” as individuals who contract with platform operators to provide services (currently limited to ride-hailing and delivery services). These workers operate with some level of autonomy, subject to the platform operator’s rules and requirements on service levels, pricing, and payment terms. Platform operators are the businesses that facilitate these services through digital platforms, connecting platform workers with consumers and exercising certain levels of management and control.
Key Benefits for Platform Workers
- Central Provident Fund (CPF) contributions: Currently, platform workers contribute to their MediSave accounts only. Under the act, platform operators will be required to contribute to both employer and employee CPF accounts for platform workers, ensuring a retirement safety net. The contributions will gradually align with those of salaried employees over five years, starting with mandatory contributions for workers born on or after Jan. 1, 1995. Older workers have the flexibility to decide whether to opt in to the increased CPF contributions but may choose to stick with a lower level in order to reduce their own mandatory contribution and thus increase their take-home pay.
- Work injury compensation: Currently, platform workers are not covered under the Work Injury Compensation Act. Platform operators are now required to provide work injury compensation insurance that offers coverage comparable to that available for traditional employees. This ensures financial security for the platform workers in case of incapacitating accidents.
- Collective bargaining: The act empowers platform workers to form associations and collectively negotiate with platform operators. This strengthens their bargaining power and voice, allowing them to advocate for better working conditions, fair payment terms, and improved benefits.
Key Implications for Platform Operators
- Compliance obligations: Operators now need to implement measures to comply with the act’s requirements, including notifying the commissioner of the start or cessation of their business, maintaining records of its platform workers (past and present), issuing earning slips, ensuring accurate CPF calculations, and keeping records, all of which will increase administrative burdens for platform operators. Failure to comply may result in administrative penalties.
- Labor relations: In giving platform workers a stronger voice, the act may lead to increased labor negotiations and potential disputes between platform operators and platform workers. Operators should be prepared to engage in constructive dialogue with these associations.
- Review and update of agreements: The act prescribes terms that should be included in the contract between the platform operators and the platform workers, such as restrictions on the workers to solicit their own clients in the course of their operations and their ability to negotiate on the fees to the end-users. The platform operators must also ensure that they do not directly or indirectly restrict the platform workers’ rights or induce the workers to contract out of their rights under the act, as that may result in criminal penalties.
- Review and update of policies: Platform operators should also review and update their internal policies and procedures to address the specific needs of platform workers, including issues of discrimination, harassment, and other grievances.
- Train managers and HR: Managers and HR should be trained on the act’s requirements and how to implement them effectively.
- Data privacy: In Singapore, gig workers are individuals who are accorded specific rights for the protection of their personal data under the Personal Data Protection Act. Concurrently, the handling of customer personal data by gig workers may impute liability for and on the platforms through which their services are made available. Platform operators should therefore ensure that proper governance is in place to mitigate against these associated risks from a regulatory, contractual, and tortious standpoint. This may encompass policies, consent and data subject access request handling procedures, incident management, training, contracting standards, and other standard operating protocols and practices with respect to personal data processing.
Takeaways
It is an opportune time for platform operators and their constituent businesses to implement and refresh their legal and compliance strategies so that they take into account the new requirements and risks brought about by the Platform Workers Act. While the scope of the legislation is primarily to offer protection to gig workers and clarify the allocation of legal rights and responsibilities with respect to platforms and platform workers, the act also impacts other ancillary regulatory issues such as data protection and privacy.
Julia Yeo, Charmian Aw, and Eu Li Lian are attorneys with Squire Patton Boggs in Singapore. © 2024 Squire Patton Boggs. All rights reserved. Reposted with permission of Lexology.
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