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The minimum will increase from seven to 10 days, and aims to ensure these workers' employment conditions remain protected even when their employers change.
From 2029, resident outsourced Progressive Wage Model (PWM) workers will have their minimum annual leave entitlement increased from seven days to 10.
The announcement follows MOM’s consultation with tripartite partners, which recognised that outsourced PWM workers may not fully benefit from leave entitlements because of their employment arrangements. These workers are employed by service providers and deployed to client companies under outsourcing contracts. Under the Employment Act, employees are entitled to at least seven days of annual leave in their first year, increasing by one day each year with the same employer, up to 14 days.
"For instance, when a new service provider is appointed to take over a service contract, outsourced workers may be rehired by the incoming service provider while continuing to work in the same role or location, but their leave entitlement might be reset to the minimum of seven days as a common employment practice in these sectors," MOM stated.
As a result, outsourced PWM workers may lose their accumulated leave benefits despite working in the same role continuously for many years.
According to MOM, this initiative aims to allow such outsourced PWM workers to receive leave entitlements that better reflect their continuous years of service, and that their employment conditions remain protected even when their employers change.
It added that the new minimum should not affect the annual increase in leave that outsourced employees are currently entitled to under the Employment Act.
"Workers who already receive leave benefits above this new minimum should continue to receive them, in accordance with their employment terms and the Employment Act," the ministry added.
To give businesses sufficient time to adjust, and allow employers and service-buyers to plan ahead and incorporate the change into their contracts, and better manage the operational and cost impact, the increase will be implemented in phases from 2029 onwards, supporting outsourced workers across five PWM sectors (cleaning, security, landscape, lift and escalator and waste management).
According to MOM, the specific implementation timeline will be further discussed by the respective sectoral Tripartite Clusters. Implementation details will be shared closer to the implementation date.
Approximately 60% of outsourced workers (based on full-time resident employees aged 25 to 64) in the above-mentioned sectors will benefit from this increase.
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Lead image / SNEF
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