Calling Singaporean Employees. Do You Know Your Legal Employment Rights?
This article provides a simple and general overview of key employment rights in Singapore. The checklist below is non-exhaustive, and covers common practices that are typically stated in one’s employment contract. Compensation and benefit plan, salary, bonuses, leave entitlements, training matters and CPF contributions are just some of the topics that will be discussed. To read the full employment act, click here.
The Employment Act currently covers blue collar workers, including most technicians; non-manual workers, especially clerical staff; and PMETs earning below SGD$4,500/month. However, under the recent Singapore Budget 2018, the government has announced plans to drop the salary cap to cover all workers. This will likely bring in 430, 000 more professionals, managers, executives and technicians (PMETs) under the Employment Act.
There is no prescribed minimum salary, and no requirement for companies to pay out bonuses. That being said, the employer needs to pay out the employee’s salary at least once a month, within seven days after the end of the salary period. Overtime pay has to be paid within 14 days. Typically, the annual bonus is equivalent to at least one month’s salary. This is also why it is often referred to as the ‘13th month bonus’. The exact amount of bonus paid out depends on the company policy, as well as both the employee and company’s performance.
Employees are entitled to work not more than eight hours a day, or over 44 hours a week. Additionally, employees cannot work non-stop for over six hours without a break. Including overtime work, employees cannot exceed 12 hours of work a day except under special circumstances such as a threatened accident, unforeseeable circumstances, or when doing work that is key to national security and defence.
Generally, office employees work on weekdays from 9am to 6pm or 7pm. However, it is not uncommon for employees to work for 10 hours on weekdays, and half days on Saturdays.
Central Provident Fund (CPF) Contributions
Companies hiring employees who are Singapore Citizens or Permanent Residents (PR) need to make CPF contributions to the employee on a monthly basis. The maximum CPF contribution rate for employers and employees is 16% and 20% respectively.
Annual leave is applicable for employees who have served at least three months with the employer. A minimum of seven days during the first year of service is mandatory, with an extra day of annual leave added for each additional year of commitment. Typically, all employees have 14 days of annual leave a year, which is double of the minimum enforced by the Singapore Employment Act.
Employees who have worked for at least six months for the employer, is entitled to 14 days of sick leave per year, and 60 days of hospitalization leave (inclusive of the 14 days). If the employee has worked for at least 3 months but under 4 months for the company, he is entitled to 5 days of sick leave per year, and 15 days of hospitalization leave (inclusive of the 5 days).
While there is no statutory requirement for employers to provide private health insurance benefits, most large companies do offer it to complement the employee’s basic Medishield scheme.
Termination of employment
The notice period id dependent on your employment contract. You are allowed to use any accrued annual leave to offset the notice period. Typically, a two weeks’ notice period will be given in the probationary period, while a month’s notice will be given after the employee is confirmed.
When downsizing or when attempting to reduce expenditure, companies may undergo a retrenchment exercise, hiring freezes, salary cuts, reduction in benefits, and layoffs. The Ministry of Manpower advises employers to be responsible when rolling out retrenchment activities.
When there is a layoff an employee, the company needs to pay all salaries and benefits due to the employee on his last day of work. They will need to follow the notice period as per the employment contract. If the employee has been in continuous service for the company for less than two years, he will not be entitled to any retrenchment benefit if he is dismissed on the ground of redundancy or by reason of any reorganisation of the employer’s profession, business, trade or work. The benefits depend on the size and financial position of the company, and should ideally be worded in the employment contract. The duration of the notice shall be as per the employment contract.
Education & Training
While encouraged by the Ministry of Manpower, the company is not obliged to provide mandatory training for their employees.
Non-Statutory Benefits and Perks
Most companies in Singapore also offer non-statutory benefits to their employees in a bid to attract and retain talent. Some common practices include:
- Per Diem
Employees who go for business trips out of Singapore typically have a per-day allowance, transportation allowance, or reimbursements of expenses.
- Employee stock purchase
Some companies allow employees, especially senior ones, to have an employee stock purchase plan.
- Other perks
It is not uncommon to have sponsored training programmes, mobile phone plans, paid gym memberships, free team bonding activities, staff referral schemes and more.
Find out more
As employees, it is also your duty to research and find out your entitlements to check if you are fairly treated. There are many resources available online.
- Case studies
If you are keen to read case studies on how companies in various sectors treat their employees, check out the Workright initiative. This can give you an insight on what good companies offer.
- Common scenario-based FAQ on employment rights
Ministry of Manpower has helpful FAQ to common scenarios faced by employees here. Questions applicable to all employees at various points of their career are included. Answers to questions such as ‘I am currently on probation and my employer has been asking me to do work beyond my contractual working hours. Does my employer have to pay me for overtime?’ and ‘My employer requests that I work on my rest day. How much should I be compensated?’ are all available on the FAQ site.