Phantom workers scam 1

A recent spate of trials relating to phantom workers have been appearing in the Singapore courts during the past few months.

Under Singapore employment laws, quotas are set on the number of foreign workers that can be employed in low skill industries like retail or food outlets. These quotas are based on a ratio of a certain number of foreign workers to every local worker. Therefore, increasing the number of local workers allows an employer to employ more foreign workers who tend to be cheaper and more willing to work long hours.

Problems arise when the local workers are employed in name only. Some companies list local employees who never even turn up for work for 1 day. In one case, even deceased persons were listed as employees. To give credence to claims of having local employees, companies make periodic deposits into the phantom employees' Central Provident Fund accounts which ordinarily are compulsory for all employees, and are meant for retirement purposes.

Extensive investigations are required to unearth these phantom worker scams, including interviews with all employees in a suspected company and scrutiny of payroll accounts of the suspect company.