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What you need to know about the amended Employment Act

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Singapore’s main labour law to help maintain reasonable business standards has been updated and amended, with many changes coming into effect since April 1, 2014.

The Ministry of Manpower (MOM) has made multiple amendments to the Employment Act after a phase one review of the law, which aims to better protect workers and improve employment standards.

As an HR professional, no matter what industry you work in, it’s important you have a full understanding of the changes to the law to ensure you don’t run afoul of it.

More workers will be protected

  • Since April 1 this year, PMEs earning up to $4,500 will have general protection for things like unfair dismissal redress, paid public holidays, paid sick leave and hospitalisation leave.
  • The salary threshold for non-workmen to be covered under the working hours-related provisions will be raised from a basic monthly salary of $2,000 to $2,500.
  • Employers cannot deduct more than 25% of an employee’s salary for accommodation, amenities and services. Go here for more information on salary deductions.

Flexibility for employers 

  • To be eligible to legally redress unfair dismissal where notice is given for PMEs earning up to $4,500, they must have worked with the same employer for at least 12 months.
  • The salary threshold for non-workmen will be increased to $2,500, however the rate payable for overtime work will be capped at the salary level of $2,250. This is so employers can better manage costs.
  • Employers have an additional option to grant time-off in-lieu for PMEs who are required to work on public holidays, subject to mutual agreement. If there’s no mutual agreement, at least half a day off in-lieu has to be granted.

Stronger enforcement for compliance

  • There are stiffer penalties for failure to pay salaries. For a first offence, a fine of between $3,000 and $15,000 and/or maximum six months’ jail in imposed. Subsequent offences will receive a fine of between $6,000 and $30,000 and/or maximum 12 months’ jail.
  • Employment officers/inspectors have now been granted the power to arrest any employer who is believed to not be paying salaries. These inspectors also have the right to enter a workplace and conduct spot checks.
  • Company directors or partners are more accountable for offences under the Employment Act committed by the company. In these cases where they have failed to exercise reasonable supervision, they will be presumed negligent and held liable.

Changes you need to prepare and look out for at a later date are:

  • From 1 April 2015, the period for which eligible workers are not entitled to retrenchment benefits will be reduced from three to two years.
  • Itemised payslips will be mandatory by 2016. A set of Tripartite Guidelines was issued earlier this year to help employers start to adopt this workplace practice. Employers can also find out about what is required of them and a range of different tools they can use for this here.

The Ministry of Manpower is also currently doing their second phase of the review, which is mainly focused on better protection for contract workers, freelancers and foreign workers.

See all detailed information on the amendments here and here.

Image: Shutterstock 

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