Parliament: New guidelines for hiring freelance workers launched to help ease disputes

The Government will take the lead to implement the "contribute-as-you-earn" model, said second manpower minister Josephine Teo in Parliament on March 5, 2018.
The Government will take the lead to implement the "contribute-as-you-earn" model, said second manpower minister Josephine Teo in Parliament on March 5, 2018.ST PHOTO: KUA CHEE SIONG

SINGAPORE - A major concern among self-employed workers is payment disputes, but it is impractical to mandate written contracts for all freelancers and gig workers, Second Minister for Manpower Josephine Teo said in Parliament on Monday (March 5).

A set of guidelines on best practices for engaging freelance services has been launched instead, to help reduce such disputes.

With the new Tripartite Standard on Contracting with Self-Employed Persons, freelancers and gig workers will be able to identify and contract with progressive service buyers who adopt the standard, she said.

Buyers who adopt the standard need to discuss and agree clearly with the freelancer the terms of engagement, such as the range of services to be delivered, project timelines and milestones, payment schedules. These will be set out in writing.

"Over time, the standard will help shape contracting norms and entrench best practices," Mrs Teo said during the debate on the Manpower Ministry's budget.

The Tripartite Alliance for Dispute Management will also extend voluntary mediation services to all self-employed who have payment disputes with businesses, she added.

The standard was one of several recommendations made by a tripartite workgroup looking into the concerns of the self-employed, which the Government is taking up.

The workgroup was set up last year, after Manpower Minister Lim Swee Say highlighted the possible increase in the number of self-employed people in Singapore, given the emergence of the gig economy.

Mrs Teo said those who make their income primarily through self-employment now make up 8.4 per cent of the resident workforce.

This is well within the range of 8 to 10 per cent observed over the last decade, she said.

The tripartite workgroup also recommended that a prolonged medical leave (PML) insurance product be developed to mitigate a self-employed person's loss of income during prolonged injury or illness.

Today, some self-employed workers buy additional riders on top of their private insurance plans to provide for this but there is a lack of an affordable standalone PML product, she said.

NTUC Income is keen to develop such a product, Mrs Teo said, adding that other insurance companies may also offer such insurance.

The aim is to have a viable plan and for a PML insurance product to be available next year, she said.

The Government will also encourage the widespread adoption of insurance in some higher-risk occupations, starting with sports coaches and instructors, as well as taxi and private hire care drivers.

The Ministry of Education has agreed in-principle to help shape a new norm by contracting only with self-employed coaches and instructors who have such PML insurance coverage, Mrs Teo said.

Self-employed coaches and instructors may then price the cost of PML insurance coverage into their bids for work or projects.

MOM and the Land Transport Authority will study how to ensure that active taxi and private hire car drivers also have PML insurance coverage, she added.

Mrs Teo also noted that about one in four self-employed people fail to keep up with their Medisave contributions.

To help this group save enough for their healthcare and retirement needs, the Government is studying how to implement a "contribute-as-you-earn" (CAYE) model, under which the service buyer hiring the freelancer has to make a contribution to the person's Medisave account, as and when the service fee is paid.

This is similar to how employers pay a contribution to their workers' Central Provident Fund (CPF) accounts alongside their salaries every month, Mrs Teo said.

The CAYE model will not be straightforward to roll out, she noted.

"We will have to work through issues, such as the correct amount of Medisave contributions to deduct in each transaction."

For a start, it is realistic for this to work only when a corporation is the service buyer, she added. It is not possible for an individuals, such as a commuter who uses Grab, to make contributions to drivers' Medisave accounts.

The Government will take the lead to implement CAYE, Mrs Teo said.

Government procurement entities aim to start a pilot by 2020 which will allow them to work through the implementation issues for CAYE and help smoothen its subsequent implementation in the private sector.