HR's Guide to Managing Singapore Employment

Singapore is renowned worldwide for its laws. However, less recognized is the intricate network of statutes and legal requirements detailed in its labor laws, which HR professionals must grasp when considering Singapore employment.

From hiring and onboarding employees, to termination and retrenchment and right down to tax requirements, there’s a lot to know about Singapore employment. In this article, we take a deep dive into both the legal requirements, and some prevailing norms in Singapore, that you’re going to need to consider.

Legal Framework in Singapore

In Singapore, the legal framework governing employment is created and handled by two different entities—the Employment Act (which includes the Ministry of Manpower [MOM]) and the Central Provident Fund (CPF).

The Singapore Employment Act is the main legislation laying out the terms and conditions of employment for Singaporean employees. It codifies basic employment rights and protections for workers, like the regulation of working hours, overtime pay, rest days, annual leave entitlements, and termination. The Act applies to most employees, with the exception of positions such as managers and executives earning above a specified salary. Its coverage also doesn’t apply to domestic workers and government employees.

In addition to the Singapore Employment Act, the statutory board called MOM plays another important role in regulating Singapore employment. MOM is responsible for implementing and enforcing labor laws and regulations, including work pass regulations for foreign employees, workplace safety and health standards, and dispute resolution. Employers need to prioritize compliance with MOM's regulations, which exist to provide fair treatment to all employees.

Another important statutory board is the CPF, a mandatory social security savings scheme for Singaporean and permanent resident employees. Under the CPF, both employers and employees are required to make monthly contributions to employees' CPF accounts, which are used to fund their retirement, healthcare, and housing needs. Employers need to make timely and accurate CPF contributions to meet their obligations towards their employees' social security.

For HR professionals working with Singapore employment, it’s important to stay up to date on the latest regulations, and keep a keen eye on compliance at your organization, so you don’t incur fines or other penalties.

Hiring and Onboarding Process

The hiring and onboarding process in Singapore involves several key steps meant to guarantee you remain compliant with local regulations and experience smooth integrations of new employees into your organization.

Types of work passes

One of the first considerations you need to make when hiring foreign workers for Singapore employment is the type of work pass they require. The most common work passes are the Employment Pass (EP) for professionals, the S Pass for mid-level skilled workers, and the Work Permit for foreign workers in construction, manufacturing, marine, process, or service sectors. Each work pass has specific eligibility criteria, and you have to ensure that foreign employees hold valid work passes as long as they work for your organization.

Learn more: Singapore Employment Pass: Updates & Requirements in 2023

Employment contracts

Employment contracts are essential for defining the terms and conditions of Singapore employment. These contracts should clearly outline key details such as job responsibilities, salary and benefits, working hours, leave, termination clauses, and other important employment details. You’ll need to make sure that your employment contracts comply with the requirements under the Employment Act.

Probationary periods

Including a probationary period into your contract is considered standard practice in Singapore. During the probationary period, which typically lasts between three to six months, you’ll have the flexibility to terminate employment with shorter notice periods if your employee's performance or conduct is unsatisfactory. That said, you and your organization must adhere to fair employment practices and provide employees with reasonable support and feedback during their probationary period.

Onboarding practices

Like elsewhere, the onboarding process is incredibly important for defining the success your employees will have at your organization. This includes providing them with necessary information and resources to understand their roles and responsibilities, introducing them to key stakeholders and team members, providing training and orientation sessions, and addressing any questions or concerns they might have.

You should also use the onboarding process as an opportunity to communicate your company's values, cultures, and expectations, helping them get up to speed with their new workplace environment and cultivate a sense of belonging from the get go.

Take your onboarding process to the next level: Download our comprehensive 30-60-90 Day Plan now!

Wages and Benefits

Paying wages and offering benefits are going to be at the top of your priority list when offering Singapore employment. Here’s what you need to consider:

Minimum wage and Local Qualifying Salary (LQS) Scheme

Unlike some countries, Singapore doesn’t have an official minimum wage. That said, the government has introduced the Local Qualifying Salary (LQS) scheme, which sets a minimum salary threshold for eligible local employees to qualify for various government support schemes, such as the Workfare Income Supplement (WIS) and SkillsFuture Credit. In other words, employers are incentivized to pay their employees a minimum amount, or miss out on government support.

Working hours

• General: The standard workweek in Singapore is 44 hours, typically spread over five or six days. Actual working hours might vary depending on industry practices and individual employment contracts.
• Overtime: Employees are entitled to overtime pay for work that extends beyond normal working hours. Overtime rates are specified in the Employment Act and typically range from 1.5 to 2x the hourly basic rate, depending on the employee's designation and nature of work.
• Working week: While the standard workweek is 44 hours, specific working hours and rest days vary depending on factors like industry norms, shift arrangements, and collective agreements.

Central Provident Fund (CPF)

The CPF is a mandatory savings scheme for Singaporean and permanent resident employees, as well as certain foreign workers. Both employers and employees are required to make monthly contributions to the CPF, which are allocated to different accounts for retirement, healthcare, and housing purposes.

Check out our free CPF calculator Singapore

Leaves and holidays

• Paid time off: The Employment Act stipulates Singapore annual leave entitlements based on how long your employee has been with your organization, ranging from seven to 14 days per year. Employers can also offer additional leave benefits that go beyond the requirements outlined in the Singapore Employment Act.
• Public holidays: All employees are entitled to paid Singapore public holidays (there are typically 11 each year.)
• Sick days: Employees covered under the Employment act are entitled to outpatient sick leave and hospital stay so long as they’ve been at your organization for three or more months.
• Maternity/paternity leave: Mothers are entitled to up to 16 weeks of government-paid maternity leave (within 12 months of giving birth) so long as their child is a Singapore citizen. Otherwise, mothers receive 12 weeks of leave without government pay. Fathers who meet certain qualifications are eligible for up to three weeks of Government Paid Paternity Leave (GPPL).
• Parental leave: Beyond maternity and paternity leave, Singaporean employees are also eligible for shared parental leave, allowing parents to share caregiving responsibilities for their newborn child.
• Bereavement leave: While not a statutory requirement, most Singapore employers typically offer 2-5 days of paid bereavement (or compassionate) leave to employees in the event of the death of an immediate family member.
• Marriage leave: Like bereavement, marriage leave isn’t mandatory. But some employers may provide paid leave for employees getting married as an added benefit.
• Voting leave: Employees are entitled to paid time off to vote in national elections or by-elections.
• Military leave: Reservist employees may be granted time off from work to fulfill their National Service obligations, with some employers optionally providing paid leave during this time.

Employee Benefits

In addition to the statutory benefits, you may want to offer a variety of employee benefits to attract and retain the best available talent. These could include health insurance, retirement plans, flexible work arrangements, wellness programs, employee assistance programs, or other perks aimed at enhancing employee well-being and job satisfaction.

You should tailor your benefits packages to meet the diverse needs and preferences of your target workforce in order to remain competitive for Singapore employment. For instance, if you’re typically recruiting younger employees, consider adding on marriage leave as a potential benefit—it may be an attractive offering and even a deciding factor for top talent looking at your organization.

Performance Management and Development

As with HR best practices around the world, in Singapore effective performance management and development strategies are key to enhancing employee engagement, productivity, and employee retention. Here's what you need to know to make the most of Singapore employment performance:

Setting objectives and performance reviews

First, you need to establish key performance indicators (KPIs) and expectations for your employees, aligning them with your organization's goals and priorities. Regular performance reviews (conducted frequently, with an official one done annually) allow managers and employees to assess progress, provide feedback, and identify areas for improvement. These reviews should take a holistic look at all performance metrics, like job competency and culture fit.

Empower your team to reach new heights: Download our Total Performance Review Kit

Training and development opportunities

Successful companies recognize the importance of investing in employee training and development to enhance skills, knowledge, and capabilities. For your Singapore employment, consider offering a range of training programs, workshops, seminars, and certifications to support your team’s growth and career advancement.

Training initiatives should cover technical skills, soft skills, leadership development, industry-specific competencies, and emerging trends relevant to your employee's job function or career aspirations.

Career progression

Career advancement opportunities are an essential part of talent retention and overall success in Singapore employment. There are multiple ways you can lay a path for advancement, including:

• Internal mobility: Create internal job postings and transfers to help encourage career growth within your organization.
• Promotions: Recognize and reward high-performing team members with opportunities for advancement to higher-level roles or positions with increased responsibilities.
• Mentorship and coaching: Provide mentorship and coaching programs to support your employees in their career journey, offering guidance, advice, and support from experienced team members or senior leaders.
• Career pathing: Map out clear career paths and progression routes for your employees, outlining the skills, experiences, and milestones needed for them to advance within your organization.

Employee Relations and Termination

For Singapore employment, managing employee relations and handling terminations requires careful attention to legal requirements, communication protocols, and conflict resolution strategies. Here's what you need to know:

Termination of employment

When you need to terminate someone’s employment, you must adhere to the statutory notice period outlined in the employment contracts or the Employment Act. Typically, notice periods range from one to three months, depending on the employee's length of service. You also need to provide payment in lieu of notice. Also, while severance pay isn’t technically mandatory, it is common for employers to offer 1-2 weeks of salary or more per year of service.

Redundancy and retrenchment

In cases of redundancy or retrenchment due to business restructuring, economic downturns, or technological advancements, you need to comply with a variety of statutes imposed by MOM. These include abiding by the notice period that should be outlined in their employment contracts, and paying severance—called a retrenchment benefit—to employees who’ve worked for your organization for at least two years.

While this might differ based on the particular employment contract, MOM states it is common to offer between two weeks and one month of salary per year of service. While employees who have worked fewer than two years aren’t entitled to a retrenchment benefit, MOM suggests, “an ex-gratia payment out of goodwill.”

Communication and conflict resolution

Effective communication is key for managing Singapore employment relations and resolving conflicts in your workplace. You should establish and promote open channels of communication to address the concerns of your team as promptly as possible before things escalate.

Additionally, your organization can offer training programs on effective communication, conflict management, and emotional intelligence to better equip its employees and managers with the necessary skills to navigate challenging situations.

HR Compliance and Reporting

Staying compliant is enormously important for businesses seeking success in Singapore. This is made far easier with well-kept records, and diligent data management. Here are a few points to consider:

Recordkeeping and reporting

Your HR department will need to maintain a comprehensive log of employee records, including personal information, employment contracts, payroll records, time off records, and performance evaluations. Accurate recordkeeping maintains compliance with requirements (and streamlines processes in the event of an audit) as well as enabling your organization to track employee information effectively. You should lean on available technology to establish robust recordkeeping systems, helping to ensure data accuracy, accessibility, and security.

Data privacy

Compliance with the Personal Data Protection Act (PDPA) is essential for protecting the data rights of your employees—and staying within the law. You’ll need to obtain consent before collecting, using, or disclosing personal data and meet the PDPA requirements for data retention, access, and security measures.

Implementing data protection policies, conducting regular privacy impact assessments, and offering your employees training on data privacy best practices will lower the risk of non-compliance all while protecting sensitive information.

Tax and payroll compliance

Like elsewhere, tax and payroll compliance are of the utmost importance for Singapore employment. This includes deducting and remitting employee contributions to the CPF, calculating and withholding income tax, and submitting accurate payroll reports to the Inland Revenue Authority of Singapore (IRAS). You will need to stay informed about changes to tax laws, payroll regulations, and CPF contribution rates to make sure your organization keeps compliant and avoids any penalties.

Read next: Payroll Singapore Reference Guide: Everything You Need to Know

Navigating Singapore’s Employment Lifecycle Management

It is crucial for HR leaders to stay well-informed about Singapore employment laws and regulations. This knowledge is essential for ensuring compliance and fostering a positive work environment for employees.

Looking for additional resources to improve your HR practices and employee experience? Leveraging technology such as AI tools for HR can decrease administrative tasks, improve the accuracy and security of essential HR functions such as payroll and employee records management, and streamline your employee’s access to the benefits that keep them engaged.

Omni’s automated payroll processing brings a new level of ease to the payroll process. With secure and centralized employee records, HR teams can swiftly access employment contracts and essential documents that support payroll practices. Our time and attendance features empower teams to automate data and produce accurate reports in minutes. And with payroll solutions that support SGD and Singapore pay schedules, Omni offers an entire suite of solutions to make your payroll system seamless.

If you’d like to learn more about how Omni’s all-in-one HR software automates the entire end-to-end employee lifecycle, saving People leaders from administrative tasks and increasing organizational innovation,

book a demo with our team today!