The Work Injury Compensation (WIC) Bill 2019 was passed in Singapore's Parliament on 3 September 2019, bringing a range of far-reaching implications for employers, employees, and insurance providers.
Among the key changes for employers to note are: more clarity in terms of WIC-compliant insurance policies; enhanced insurance T&C to prevent unfair exclusions; and insurance premiums aligned with companies' safety records (thus companies with good safety records can benefit from lower premiums).
Among the key changes for employees are: enhanced coverage, i.e. all non-manual employees earning up to S$2,600 per month to be covered under WIC insurance; higher maximum compensation in cases of death and permanent incapacity (PI); and enhanced wage scheme for light duties after accident.
For both employers and employees, the new Bill implies: faster current incapacity assessment to expedite claim resolution; no need to file a claim in cases of serious injury or death; and usage of industry salary data to compensate employees in cases where employers have failed to provide pay slips.
[Scroll past the timelines for full details of the new Act's provisions and amendments]
Timelines for implementation
The Work Injury Compensation Act (WICA), and its related subsidiary legislation amendments, will be implemented in stages in order to allow employers and insurers time to adjust.
Firstly, by 1 January 2020, compensation limits will be updated to keep pace with wage growth and healthcare costs.
By 1 April 2020, the scope of compulsory insurance will be extended to non-manual employees (NME) in non-factories, and the NME monthly salary threshold will be updated from S$1,600 to S$2,100.
The new Act will fully take effect on 1 September 2020.
Key amendments to Work Injury Compensation Act
(A) Prevent injuries from happening in the first place
a) Facilitating more accurate premium pricing to reward safer companies (i) Previously there was no information sharing between insurers of their clients’ past claims record. This has resulted in safer companies subsidising the less safe companies as there is little premium differentiation between these companies. (ii) Going forward, designated WIC insurers will required to share policy and claims data with Ministry of Manpower (MOM). The data will be made available to all designated insurers approved by MOM.
(B) Expediting WICA claims processing
a) Allowing compensation to be based on current incapacity (i) Delay in settling PI claims meant some injured employees can only receive their compensation after several months, while employers incur upkeep and maintenance expenses to look after the injured staff. (ii) To expedite compensation for PI, compensation can now be based on the prevailing state of incapacity (termed "current incapacity" or CI) at the earliest opportunity six months from the date of accident. The more complex injuries can still be assessed for permanent incapacity at a later date.
b) Streamline process to "auto-claim" (i) For cases of fatal or serious injuries, employees or their representatives will no longer need to file claim applications. Claim processing will commence once MOM or the insurer is notified of the accidents. (ii) Employees who do not wish to make a claim under WICA can still opt out.
c) Compensate based on a multiple of the basic monthly salary (i) In cases where there is no readily available and reliable evidence to compute the employee’s average monthly earnings (AME), the Commissioner can now order compensation to be computed based on a multiple of the employee’s basic monthly salary.
d) Designated WIC insurers to process insured claims (i) Designated WIC insurers will process all insured claims – for temporary incapacity, fatal and permanent incapacity. A licensing framework will be introduced to regulate insurers as well. (ii) The insurers must comply with MOM’s processing guidelines and cannot frivolously reject claims. Insurers do not determine the compensation amount as the basis of computing the compensation sum is prescribed in the WICA Schedule. (iii) To ensure that injured employees continue to receive their compensation promptly, insurers have to meet the processing timelines set by MOM. MOM will also conduct audits on insurers for compliance. (iv) Designated insurers who fail to comply with MOM’s licensing conditions may face penalties (AFP) of up to S$30,000 for each such failure, or in more serious cases, have their licenses suspended or revoked.
(C) Enhancing protection for employees
a) Expand mandatory insurance coverage (i) The WICA Subsidiary Legislation will be amended to extend mandatory insurance to NMEs regardless of where they work, earning up to S$2,600 per month. (ii) This will extend mandatory insurance coverage to about 300,000 more employees.
b) Scope of compensation to include light duties (i) Employees on light duties due to work injury will be compensated for their lost earnings. This is to put them on par with employees on medical leave due to work injuries.
c) Compulsory reporting for all medical leave or light duties (i) To address some irresponsible employers that may avoid reporting work accidents or attempt to influence doctors to prescribe lesser medical leave, employers are required to report all work-related medical leave or light duties to MOM. (ii) The reporting requirements will be simplified for accidents with less than four days of medical leave or light duties, to ease administrative process for employers.
d) Ensuring proper assessment of work injuries (i) Where there are strong concerns and evidence of unfair or inadequate incapacity assessment by the employer’s doctor, an employee will be allowed to switch doctors, on a case-by-case basis.
e) Updating compensation limits (i) To keep pace with wage growth and healthcare cost, the compensation limits for death and permanent incapacity will be increased by about 10% to S$225,000 and S$289,000 respectively. (ii) The compensation limit for medical expenses will be raised from S$36,000 to S$45,000, ensuring the limit continues to cover more than 95% of all WICA claims medical expenses. (iii) This change to WICA Subsidiary Legislation will take effect on 1 January 2020.
(D) More certainty for employers
a) Designated WIC insurers to sell only WICA-compliant policies (i) To safeguard employers, a core set of standard terms for WICA-compliant policies will be prescribed to ensure adequate coverage. Insurers can offer additional coverage but they cannot reduce the benefits under the standard policy. (ii) A maximum fine of S$80,000 will be imposed on any person who offers policies purporting to be WICA-compliant. Such person will have to pay compensation as though the policies offered were WICA-compliant policies. (iii) A maximum fine of S$80,000 will be imposed on any unauthorised person who offers WICA-compliant policies.
b) Recourse for employers (i) The Commissioner can order the claimant to refund the employer (or insurer), if the employer (or insurer) had paid for the medical expenses or PI or death compensation due to error or false or misleading information.
(E) Other amendments
a) Safeguard against fraud or error (i) The current WICA does not allow late objections irrespective of the reasons, if no objection is raised within the given 14-day from the receipt of the notice of assessment. This will be amended to allow for late objections if the late objection is due to error or fraud by another person.
b) Increased and new penalties (i) Any person withholding necessary information or documents for claims processing will be liable for a maximum fine of S$5,000 and/or 6 months’ imprisonment. (ii) Failure to pay deposit compensation ordered will result in a maximum fine of S$15,000 and/or 12 months’ imprisonment. (iii) The maximum fine for non-or-late payment of compensation will be increased S$15,000. (iv) The maximum fine will be doubled for a second or subsequent conviction for WICA offences.
Comments from labour experts on WICA
Minister of State for Manpower, Zaqy Mohamad noted that WICA has been brought about after consulting unions, employers, insurers, NGOs and the general public. He said: "WICA 2019 is important not only because it will provide faster and fairer compensation for work injuries, but because it should result in fewer injuries occurring in the first place."
Melvin Yong, Assistant Secretary-General, National Trades Union Congress, said that amendments will undoubtedly enhance the protection of employees; however this is only the first half of the workplace safety and health (WSH) equation. "WSH needs to be tackled holistically, and the Labour Movement stands ready to partner with companies to promote both workplace safety and health."
Douglas Foo, Vice President, Singapore National Employers Federation, talked about the the updates to WIC-compliant policies. "With a prescribed core set of standard terms for WICA-compliant policies, employers will be assured of complete coverage for their WICA liabilities. This safeguards employers’ interest and we welcome this change."
Commending the amendments to the Bill during the second reading, Patrick Tay, Assistant Secretary-General, NTUC, called out the mandatory requirement to report all instances of MC or light duties due to work injuries, as it ensures less incentive for employers to influence doctors to prescribe fewer days of MC, among the other aspects cited.
He added: "The work injury compensation (WIC) framework is a no-fault system with the aim of providing workers injured in work-related accidents with low-cost and expeditious means to claim WIC. The Bill seeks to improve the framework to better enable the meeting of its objectives."