Employers in Singapore cautioned not to misclassify workers as managers, execs

Employers in Singapore cautioned not to misclassify workers as managers, execs

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Singapore's Ministry of Manpower (MOM) has released a statement citing that about 50 claims were received by the Tripartite Alliance for Dispute Management (TADM) in 2017 from workers who felt that they had been wrongly classified as a manager or executive (M&E) and unlawfully denied statutory entitlements such as overtime pay.

In about 90% per cent of these cases, MOM/TADM found the worker’s complaint to have enough proof, and the employers were ordered to make due compensation.

Under local laws, an employee is entitled to overtime pay when two criteria are met:

  1. First, he must not be employed in a managerial or executive position.
  2. Second, his basic pay must be S$4,500 or less if he is a workman or S$2,500 or less if he is a non-workman.

If the employee is statutorily entitled to overtime pay, the rate payable must be at least 1.5 times his hourly basic rate of pay if the overtime work is required by the employer. Additionally, overtime payment cannot be substituted with time off.

Employers must be watchful of the following rules regarding such cases:

  1. In handling such misclassification cases, the employee’s job title is not a relevant factor.
  2. Rather, each case is assessed individually based on the specific scope of the job, such as the level of authority and decision-making powers in the management of business functions, recruitment, discipline, termination of employment and staff performance and reward.

"MOM takes a serious view of employers who misclassify employees in order to avoid their statutory obligations and will take stern action against such errant employers," said the Ministry in the release.

It has also noted that the incidence of such misclassification has been consistently low in relation to other complaints, constituting less than 1% of all cases received by TADM.

ALSO READ: Singapore government accepts NWC wage guidelines for 2018/2019

The issue was recently brought to light by National Trades Union Congress (NTUC) Assistant Secretary-General Patrick Tay in a blog post on 21 June, in which he said some bosses inflate an employee's job title to avoid paying the worker for overtime work.

The blog post titled "Disguised PMEs – Exposing the Truth Behind Fake Executive Titles" shared an example of a misclassification of a PME (Professional, Manager and Executive).

It was "an example of a ‘disguised PME’ scenario (also known as bogus PME or inflated titles) in that the worker is a de facto PME."

In the post Tay said: "It is estimated that there are more than 30,000 who are classified as PMEs earning less than $2,500 per month."

Tay added: "It is a stark reminder to all employers and human resource leaders to use the terms ‘managers and executives’ with care and due diligence. This is particularly so as some have been known to wrongly classify their workers to avoid them being represented by unions on the basis that they are in a conflicted position with their ‘managerial and executive’ powers."

Conclusively, he said: "Assessment must be based on the job scope instead of the job title."

Please read the full post below:


Photo / iStock

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