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Singapore government accepts NWC wage guidelines for 2018/2019

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The government has accepted the National Wages Council (NWC) Guidelines for 2018/2019.

media release by the Ministry of Manpower noted the government welcomes strong involvement from employers and unions in operationalising the 23 Industry Transformation Maps.

"Companies should also make use of available Government support, such as the Lean Enterprise Development Scheme, to redesign jobs and transform toward higher productivity. This is needed for wage growth to be sustainable and for the economy to stay competitive," it stated.

The government also recognises a need to ensure sufficient support for workers to stay agile and relevant, and noted employers should tap on schemes such as Adapt & Grow and SkillsFuture to meet their manpower needs.

Earlier, the NWC recommended a set of wage guidelines for 2018/2019. The guidelines, which have been accepted, include:

Wage recommendations for all workers

Taking into consideration the different business conditions, productivity growth and economic outlook across firms and sectors, the NWC recommended:
  • Employers which have done well and have good business prospects should reward their workers with built-in wage increases, and variable payments commensurate with the firms’ performance;
  • Employers which have done well but face uncertain prospects may exercise moderation in built-in wage increases, but should reward workers with variable payments commensurate with the firms’ performance; and
  • Employers which have not done well and face uncertain prospects may exercise wage restraint, with management leading by example, and should make greater efforts to improve business processes and productivity.
In addition, the NWC encourages companies that achieved productivity improvements in 2017 to share the gains with workers through a one-off special payment.

Wage recommendations for low-wage workers

Building on the progress made from ongoing tripartite effort, the NWC believes it is useful to continue to provide quantitative guidelines for low-wage workers, and to further raise the basic wage threshold from $1,200 to $1,300.

At the same time, as economic prospects and business outlook continue to vary across firms and sectors, the NWC sees merit in continuing to set a range for the recommended wage increases.

As such, the NWC recommended that:

  • Employers grant low-wage workers a built-in wage increase in the form of a dollar quantum and a percentage, to give the low-wage workers a higher percentage built-in wage increase;
  • Employers grant a built-in wage increase of $50 to $70 for low-wage workers earning a basic monthly wage of up to $1,300; and
  • Employers grant a reasonable wage increase and/or one-off lump sum based on skills and productivity for low-wage workers earning above $1,300.
In addition, the NWC encourages companies that achieved productivity improvements in 2017 to provide an additional one-off special payment of $300 to $600, in a lump sum or over several payments, to low-wage workers earning a basic monthly wage of up to $1,300.

ALSO READ: Industries with the highest salary increment in Singapore

Low-wage workers in outsourced work

As part of fair and progressive employment practices, the NWC recommended that service buyers and service providers take into account the experience and performance of outsourced workers when employment contracts are offered or renewed.

This helps avoid the reset of wages and benefits for outsourced workers who perform the same job functions when service providers are changed.

The NWC urged service buyers and service providers to work together to ensure adequate training for and improving the employment terms of outsourced employees.

Employment of older workers and back-to-work women

To support employers hiring older Singaporean workers, the NWC noted that the Special Employment Credit (SEC) was extended until 2019. Wage offsets of up to 11% will be provided to employers hiring older Singaporeans aged 55 and above, earning up to $4,000 a month.

The NWC also encourages employers to implement flexible work arrangements and family-friendly workplace practices to recruit and retain back-to-work women as a valued source of manpower and talent.

Progressive Wage Model (PWM)

Apart from the above recommendations, the NWC has voiced its support for the tripartite efforts in advancing the PWM in the cleaning, security, and landscaping sectors, covering areas of skills, productivity, career progression and wages.

The NWC  also noted that employers in sectors such as public bus transport and healthcare have adopted the concept of “progressive wages and skills” and provided a clear pathway for their workers to upskill and upgrade, including through structured training and participating in SkillsFuture initiatives.

Additionally, it recognises and supports the intent of the lift and escalator sector to do the same, and urges employers in other sectors to follow suit.

PWMs, reinforced by skills upgrading and productivity improvement, will allow employers to make better use of manpower and pay higher wages, commensurate with their workers’ job scopes, responsibilities, skill sets and productivity levels.

Application of guidelines

The NWC guidelines cover the period from 1 July 2018 to 30 June 2019 and are applicable to all employees - management, executives, professionals and rank-and-file employees, unionised and non-unionised companies in both public and private sectors. These recommendations also apply to workers who have been re-employed.

To facilitate wage negotiation, the NWC noted that employers should share relevant information, such as company wage information, business performance and prospects, with unions. The NWC also encourages employers that encounter difficulties in implementing the guidelines to work with the employers’ associations and unions, to address the issues.

ALSO READ: Salary and hiring trends for Singapore in 2018

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