In the Philippines, a common topic of discussion within organizations is the subject of Service Incentive Leave (SIL). Employers often wonder how many days they should give for SIL and how it differs from conventional sick leave and vacation days.

This article will guide you to understand what SIL is according to the Philippine Labor Code, the criteria for granting this benefit to your employees, and how it differs from other types of leave. Let’s dive into the SIL meaning and why it is compulsory in the Philippines.

What is Service Incentive Leave (SIL) and is it mandatory?

Service Incentive Leave (SIL) is a benefit your employees are entitled to after working for at least a year. The SIL entitles eligible employees who have worked for over a year to have five days of incentive leave with pay. Eligible employees can also convert their leaves to cash if they don’t use it by the end of the year.

The SIL is mandated in the Philippines under Article 95 of the Labor Code which states that offering service incentive leave to eligible employees is not optional and is a legal requirement. Additionally, service incentive leave in the Philippines is a government-mandated benefit as it gives employees a chance to maintain a better work-life balance. 

With knowledge of the SIL meaning and why it is mandatory, let us examine who is entitled to service incentive leave.

Who is entitled to SIL?

As the Labor Code mandates, your employees who have worked continuously for at least 1 year are entitled to service incentive leave. A year of service is calculated from the first day of employment, regardless of continuous or broken work schedule. It includes authorized leave and holidays.

Eligible employees are entitled to 5 days of paid incentive leave per year. According to the Philippine Labor Law, the rule is that employees are entitled to five service leave credits after the end of each work anniversary year. Also, unused leave credits should be converted to cash. 

The SIL is a general leave credit which may be used by employees for medical treatments, vacations, or any other personal reasons.

Who is not entitled to SIL?

Although SIL is mandatory to eligible employees, there are groups of people excluded from this benefit:

1. Government employees

SIL benefits apply only to employees in the private sector. Personnel employed in government-owned or controlled corporations are exempted from service incentive leave.

2. Managerial employees

Employees who perform managerial functions like managing an establishment and having the authority to hire or fire other employees of lower ranks do not qualify for SIL provisions.

3. Field personnel

Personnel who perform their duties away from the office environment and whose hours and days of work are not supervised by the employer are not entitled to service incentive leaves.

4. Domestic helpers and persons in the personal service of another

Employees in this category are not covered by the benefits of service incentive leave.

5. Employees already enjoying a similar benefit

Companies that offer their employees benefits similar to SIL, for example, providing more than five days of paid leave, are exempted from providing additional SIL to their employees.

6. Employees in establishments regularly employing less than ten workers

Small businesses with less than ten employees are exempted from providing their employees with service incentive leave.

With an understanding of who is entitled to service incentive leave, it is easier for you as an employer to design an employee benefits package that adheres to the Labor Code whilst rewarding employees for their service.

How to calculate SIL?

Scenario 1: Employee completes 1 year of service

After an employee completes one year of service, they are entitled to five days of paid Service Incentive Leave. For instance, if an employee starts working on 1 January 2023, they will be eligible for SIL from 1 January 2024. 

The calculation is simple. Your employee must receive 5 days of SIL to be used within the next year after their first work anniversary. Also, depending on your company policy, the unused leave can be carried over to the next year or converted to cash. 

Scenario 2: Employee leaves before completing 1 year

If an employee resigns or you terminate their contract before they complete their one year of service, they will not be entitled to any service incentive leave.

For example, an employee who leaves your company after 11 months of service will not be entitled to any leave benefits.

Scenario 3: Employee works for more than 1 year

Your employees who have completed one year of service must have their SIL entitlement renewed every year. For instance, if your employee has worked continuously for three years and has used up their SIL benefits from the previous years, they will be entitled to five days of SIL at the beginning of their fourth service year.

Additionally, your employees who have completed more than one year of service are entitled to prorated leave credits for any additional months worked beyond their anniversary date. This means an employee who has completed 14 months of service will be entitled to 6 days of SIL. 

Here’s the calculation:

1. Calculate the monthly accrual rate:
   • 5 days of SIL per year divided by 12 months = 0.4167 SIL per month.
2. Calculate total SIL for 14 months of service:
   • 12 months (first year) = 5 days of SIL.
   • Additional 2 months (second year) = 0.4167 SIL/month * 2 months = 0.8334 SIL, rounded to 1 day.

So, the employee would be entitled to:

• 5 days of SIL for the first year (anniversary).
• 1 additional day of SIL for the extra 2 months.

Therefore, an employee with 14 months of service will be entitled to a total of 6 days of SIL.

Omni tip for SIL: When calculating SIL, the rule of thumb is your employees must have completed one year of service. Only after they fulfill this requirement can they be entitled to service incentive leave benefits. 

Now that we understand the SIL meaning and how to calculate it, let’s address a common question.

Is SIL convertible to cash?

The answer is “yes.” Unused service incentive leave can be converted to cash. The Labor Code clearly states that any unused SIL at the end of the year can be converted to its cash equivalent.

Here’s how the calculation works:

1. Determine the daily wage of your employee: 

For example, your employee earns ₱500 per day.

2. Calculate the value of their unused SIL: 

If your employee has 5 unused SIL days, the calculation would be:

5 days * ₱500/day = ₱2,500.

Thus, your employee will receive ₱2,500 for their unused SIL days.

It’s important to note that the encashment can occur at the end of a complete service year or when eligible employees terminate their employment contract.

How does SIL differ from sick leave and vacation days?

To clearly understand the difference between service incentive leave, sick leave, and vacation days, let us briefly define what each means.

• Service Incentive Leave (SIL): This is a mandated benefit under the Philippine Labor Code that entitles employees to five days of paid leave after completing one year of service. Service incentive leave can be used for any purpose the employee deems fit.

• Sick leave: This type of leave entitles an employee to a certain number of days in a year to take care of any health-related issues and is separate from SIL. The Philippine Labor Code does not mandate sick leave days. However, many companies offer them as part of their employee benefits package.

• Vacation days: Vacation days are leave days you grant your employees, allowing them to rest or have their leisure. This type of leave is mostly planned and requires approval. Additionally, similar to sick leave days, vacation days are not mandated by the law in the Philippines.

Read next: HR’s Guide to Employee Leave Management

Now, with the understanding of the SIL meaning, sick leave, and vacation days, let us explore their key differences:

• Purpose: Service incentive leave can be used for any purpose. However, sick leave is for health-related issues, and vacation days are for leisure or personal reasons.
• Legal Requirement: SIL is mandated by the Philippine Labor Code, whereas sick leave and vacation days are not.
• Conversion to Cash: Unused SIL credits can be converted to cash. However, sick leave and vacation leave can’t be converted unless permitted by the organization’s policy.

In conclusion, service incentive leave differs from sick leave and vacation days because SIL is a mandatory requirement for Philippine employers according to the Labor Code. On the other hand, sick leave and vacation days are mostly part of companies’ employee benefits packages.

What are the benefits of offering SIL?

When you offer service incentive leave to your employees, you meet legal requirements and also show them you recognize and reward their contributions. Here are some other key benefits of offering SIL: 

Incentive for service

Offering service incentive leave serves as a way for you to reward your employees for their one-year work commitment. Incentive for service motivates your employees to maintain a consistent performance and stay longer with you, reducing attrition rates.

Foster work-life balance

Allowing your employees to take paid time off for rest or leisure is essential in helping them maintain their mental health and reduce burnout, which impacts their job satisfaction. Further, employees who take time to recharge will be more focused when they return to work.

Boost employee engagement and morale

​​Service incentive leave significantly boosts your employee’s engagement and morale, which can lead to an increase in efficiency. When you make your employees feel valued through benefits like SIL, they will be more motivated to do their work.

Putting Employee Well-being First

Offering SIL to your employees demonstrates how you prioritize their well-being. By providing paid leave, you show your employees you care about their health and overall quality of life. This commitment promotes a positive work environment.

Remember, offering SIL to your employees helps create a supportive and motivating workplace, which impacts their overall productivity and benefits the organization.

Additional resources: The Modern CEO’s Guide to Growth Through Company Culture

Promoting a Culture of Recognition and Reward

Employee recognition can boost employee engagement, which affects every aspect of your organization, from culture to morale, productivity to innovation, investing in your employees is a sure fire way to improve your business functions and drive growth. 

By implementing service incentive leave in the Philippines, you ensure that you’re complying to regulations and drive employee motivation. 

Omni’s time off management capabilities help managers and HR teams swiftly navigate employee leave management. Omni’s platform allows you to approve service incentive leave on the go and keep track of who’s in and out of the office with at-a-glance scheduling. 

Our employee self-service portal empowers employees to submit their time off requests, which automatically routes to the appropriate manager thanks to customizable approval workflows. Omni seamlessly integrates with your team’s favorite work tools such as Slack, enabling managers to manage time off approvals with a simple push of a button. With automated calculations, employees and managers can easily view SIL leave balances in real-time, and track how many vacation days they have left without having to go through HR.

If you’re not quite ready to take the leap, try leveraging some free tools to simplify your leave management efforts for free. Download Omni’s Employee Time-off Request Form Template to easily gather the information you need to manage employee time and attendance.

Navigating compliance in Malaysia HR is vital as the business scene is always changing. With factors like technology and regulations evolving, HR leaders and employers must keep up to ensure both legal adherence and business success.This article aims to guide you through the essentials of HR Malaysia compliance. From understanding labor laws to staying updated on industry trends, we’ll cover everything you need to know to navigate HR compliance effectively. Whether you’re an experienced HR professional or a business owner, this article will provide you with the knowledge and tools to stay compliant in Malaysia’s ever-changing business landscape.

Why is HR compliance important?

In any given country or state, laws are provided by the government to regulate business operations. These laws include labor laws designed to safeguard the rights and well-being of employees, covering aspects like wages, working hours, discrimination, health, and safety in the workplace.

HR compliance ensures that these laws are understood, implemented, and followed within an organization. 

Failure to adhere to these laws are not only limited to legal issues but also reputational damage, loss of employee trust, decreased morale, and even operational disruptions. Therefore, compliance is crucial for maintaining a positive and productive work environment.

Additionally, HR compliance can vary from location to location due to differences in laws and regulations governing employment practices. For human resources in Malaysia, this involves understanding the specific requirements under HR Malaysia employment laws. This is crucial for ensuring your companies remain compliant. 

Read next: The 2024 HR Compliance Checklist: APAC Edition

What are the key employment laws for Human Resources in Malaysia?

1. Employment Act 1955

The Employment Act 1955 is the primary legislation for Human Resources in Malaysia that outlines the legal rights and responsibilities of both the employer and employees. It covers matters such as terms and conditions of employment, working hours, overtime, rest days, annual leave, and termination of employment, among others. 

The Act applies to employees engaged in manual labor, clerical work, or any other type of work, with a few exceptions such as domestic servants, certain categories of employees covered under other specific laws, and managerial or executive employees earning above a certain threshold. 

Under the Employment Act 1955, employers are required to meet the minimum standards set out for employment practices, which employers must adhere to for the benefit of their employees. 

2. Industrial Relations Act 1997

The Industrial Relations Act 1997 (IRA) is also one of the major HR Malaysia laws governing employment relationships, as well as trade unions and employers’ associations in Malaysia. The Act aims to promote and maintain industrial harmony and provide the regulation of the relations between employers, workmen and their trade unions. The IRA includes provisions addressing representation in cases of unfair dismissal, claims for recognition by trade unions, and the process of collective bargaining. 

3. Social Security (Socso) Act 1969

The Employees’ Social Security Act 1969, also known as the SOCSO Act, is a Malaysia HR law that created the Social Security Organization (SOCSO) to provide social safety nets for employees in the private sector and their dependents. 

Under this act, employees and their employers contribute to the SOCSO fund, which provides financial assistance in the event of work-related injuries, disabilities, occupational diseases, and death. SOCSO administers various schemes, including the Employment Injury Scheme, Invalidity Scheme, and Invalidity Pension Scheme, to provide benefits such as medical treatment, disability income, and rehabilitation services to eligible individuals.

4. Workers’ Minimum Wage Order

The Workers’ Minimum Wage Order is another key employment law HR leaders and employers should take note of when it comes to staying compliant with HR Malaysia laws. This is because the wage order sets a legal threshold for employee compensation. Failing to comply with the Order can result in penalties for employers. Another advantage this legislation serves is that it can help prevent disputes between employers and employees over wages. 

5. Other relevant regulations

Aside from the HR Malaysia employment laws mentioned above, some other relevant laws also include: 

• Employment Provision Fund Act 1991: The EPF Act 1991 establishes the Employees Provident Fund, requiring both employees and employers in Malaysia to make monthly contributions. Its goal is to provide financial security for employees’ retirement through managed investments.
• Occupational Safety and Health Act: This legislation ensures the safety, health, and welfare of employees at work.

Relevant reading: What is HRDF in Malaysia?

What are the benefits of compliance for HR Malaysia?

Avoid potential legal issues

Malaysia HR errors cost businesses huge penalties. According to a statistical report, instances of non-compliance have led to significant fines, while employment lawsuits have seen a 200% increase over the past two decades. Compliance with HR Malaysia laws and standard practices help organizations steer clear of legal troubles. Non-compliant employers may also be subjected to audits and inspections by government authorities tasked with enforcing labor laws. These inspections can lead to further penalties and corrective actions mandated by the authorities.

Improve employee relationships and morale

Malaysia HR labor laws exist to protect the rights and well-being of employees. Compliance with HR Malaysia laws ensures that each worker is treated fairly and provided with essential rights and benefits. This includes ensuring your employees are being paid fairly and working under safe conditions within reasonable working hours. Companies who prioritize labor law compliance demonstrate their commitment to creating a supportive and respectful work environment. This in turn boosts employee morale, satisfaction, and efficiency of work. 

Stronger employer brand

Failure to comply with labor laws can tarnish the employer’s reputation. A negative reputation can have long-term implications on a businesses prospects and profitability. However, if the business adheres to HR Malaysia regulations, it builds a reputation of a responsible employer in Malaysia, making it more attractive to top talent in the job market. 

Improved business reputation

Nowadays, consumers, employees and stakeholders care more about businesses behaving ethically. This is because being ethical is really important for running a successful company. When a business follows HR Malaysia laws, it not only stays out of trouble but also builds a good reputation for being fair and transparent, which fosters community trust and support. 

Strategies to Stay Compliant in Malaysia HR

Now that we’ve established the importance of compliance for Human Resources in Malaysia, here are some strategies that you can implement to remain compliant with HR Malaysia laws and regulations. 

Stay informed

Staying compliant with HR Malaysia laws can be a daunting task due to the frequent changes and updates. It requires consistent effort and attention to stay informed about the latest regulations and ensure that the organization meets its legal obligations. 

Some practical ways Malaysia HR leaders and employers can stay updated on compliance laws:

• Engage in networking activities with other HR professionals, either through formal events or informal gatherings, to exchange knowledge, share experiences, and stay informed about compliance practices.
• Rely on media reports for updates.
• Subscribe to updates from law firms specializing in employment law.
• Conduct regular audits and reviews of HR Malaysia practices to ensure compliance.
• Monitor these changes by reviewing official government websites that provide information and updates on compliance laws.

Develop clear policies

Another way to remain compliant with Malaysia HR laws and standard practices would be to develop consistent policies and procedures that adhere to these laws. The policies you create should be clear, comprehensive, and aligned with legal requirements and industry standards. 

This is because they serve as guidelines for employees and management alike, covering various aspects such as code of conduct, health and safety, leave and attendance, training and development, and more. 

Additionally, your policies and practices should remain accessible to all employees and should be properly documented.

Maintain accurate records

In regards to HR Malaysia, employers are legally required to maintain certain types of employee records under federal and state law. For example, as outlined by the Employment Act 1995 and employment regulations, employers must maintain records of employees’ salaries, wages, allowances, bonuses, and deductions, including records of overtime worked and any other remuneration provided. 

Relevant reading: Your Guide to Malaysia Payroll

Another example would be the Personal Data Protection Act 2010 which requires employers to maintain records containing employees’ personal information such as full name, identification number (e.g. MyKad number), contact details, and residential address. The records should cover employment contracts, attendance, salary and benefits, personal information, disciplinary actions, workplace safety, training, terminations and statutory filings. 

A well maintained record is important for these two reasons: 

• Accountability and transparency: This demonstrates fairness and accountability in employment practices. Transparent record keeping builds trust between employers and employees.
• Audit preparedness: With proper recording keeping, employers can easily undergo audits by regulatory authorities, or internal audits. This ensures compliance with statutory requirements. 

Invest in training on regulations

Investing in ongoing training programs for leaders and managers in Human Resources in Malaysia is important to ensure your company is compliant with HR Malaysia laws.

New hires should be provided resources and receive thorough orientation to ensure they understand their rights and responsibilities within the organization. They should also know how to report non-compliance. An environment where employees feel safe is also created when you provide regular training on preventing workplace injury. This shows your employees you care about their well-being.

Additional resources: The Ultimate Employee Handbook Template

Seek professional guidance when necessary

There are employment law attorneys that can provide your company with expert guidance on HR Malaysia compliance matters. This can help you avoid costly legal disputes and maintain a positive reputation as an employer. 

Importance of Tools for Malaysia HR Compliance

Streamlined data management

Staying on top of HR Malaysia compliance laws means investing in software that automate and streamline the record keeping process. Manual record-keeping is error-prone and time-consuming. HR tools allow for secure digital storage of employee data, contracts, policies, and other crucial documents. This makes it easier to track information, find what you need quickly, and ensure accuracy.

Read next: The Top 5 Payroll Software Malaysia Teams Are Using in 2024

Enhanced enforcement of regulations

HR software for processes such as payroll and applicant tracking include compliance measures that can make it easier for employers and HR leaders to stay compliant on HR Malaysia laws and best practices. 

• Leave management: Managing employee leave requests can be a complex task. HR tools automate leave tracking, approvals, and balances. This saves HR time, improves transparency for employees, and minimizes errors.
• Payroll management: Accurate and timely payroll is essential for employee morale. HR software can automate payroll calculations, deductions, and tax filings. This reduces the risk of errors and streamlines the entire payroll process.

Improved communication

HR tools enhance compliance for Human Resources in Malaysia through employee self-service portals. Announcements, policy updates, and payslip information can be easily disseminated electronically through a self-service portal. 

Aside from that, the portal streamlines processes by allowing employees to track leave balances, request time off, and access payslips from their end, reducing the burden on Human Resources in Malaysia.

Additional reading: Why an Employee Self-Service Portal is Your Silver Bullet for Engagement

Better decision making

With compliance management software, you can gain valuable insights to inform your strategic Malaysia HR and business functions. Workforce trends, performance metrics, and leave patterns can be easily analyzed for better resource allocation and talent management.

Building a Culture of Compliance with HR Technology

Human Resources in Malaysia play an important role in driving organizational success through effective talent management, compliance with labor laws, and fostering a positive company culture. 

Omni frees Malaysia HR teams from administrative cycles by automating the entire end-to-end employee lifecycle — from recruitment and onboarding to employee engagement and payroll — allowing you to redirect your time to strategic work that drives business growth.

Powering Asia’s fastest-growing, modern companies, Omni scales alongside your company so you can customize and leverage the system to meet your business exactly where you are — as well as where you’re going. 

With a full suite of modules to support every aspect of your business, Omni’s platform offers an intuitive and fully customizable platform that integrates with your team’s favorite tools for a seamless and timely adoption.

Book a demo with us today and learn how Omni can help you build a competitive advantage for Human Resources in Malaysia.

As Singapore’s population ages and caregiving demands rise, so does the need for flexible or hybrid work models. Flexible work options (FWAs) are becoming crucial to keep people in the workforce and attract new talent in a tight labor market. This article explores the 2024 Tripartite Guidelines for FWAs, a step towards a more inclusive and productive work environment.

What are the Singapore Tripartite Guidelines?

The Singapore tripartite guidelines are a set of recommendations jointly developed by representatives from the government, the Singapore National Employers Federation (SNEF), the National Trade Union Congress (NTUC), and various union, employer, workplace fairness, and professional bodies to address employment-related issues. 

These guidelines cover areas such as employment practices and policies, wages and benefits, workplace safety and health, among others. 

In other words, the Singapore tripartite guidelines state what you must do as an employer to promote fairness and productivity in the workplace.

Read next: Understanding the Singapore Employment Act

Overview of Singapore’s 2024 Tripartite Guidelines for Flexible Work Arrangements (FWA Singapore)

The tripartite guidelines for flexible working arrangements, otherwise known as FWA Singapore, serve as a framework for employers, employees, and unions to negotiate and implement flexible work options. These guidelines focus on the processes to submit and evaluate formal requests for FWA instead of the FWA Singapore outcome.

Flexible working arrangements refer to non-traditional work schedules that offer more flexibility in how, when, and where employees work. The Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) has grouped FWA Singapore into three categories:

• Flexi-time: staggered working hours, compressed work week.
• Flexi-place: tele-commuting, work from home.
• Flexi-load: part-time work, job sharing. 

The law will go into effect starting on December 1, 2024, as all employers in Singapore are required to set up a process for employees to submit a formal working arrangement. This means that workers can seek flexible work options such as a 4-day work week, work from home, flexible work locations, or whichever flexible work arrangement they find suitable for them. 

Additionally, while there is no legal requirement for companies to offer FWAs Singapore, employers are encouraged to adopt flexible work practices as part of their efforts to promote work-life balance, enhance employee well-being, and improve organizational productivity.

Failure to follow the guidelines may lead the Tripartite Alliance for Fair and Progressive Employment Practices to advise employers to comply, and the Ministry of Manpower (MOM) may issue warnings and require workshops for non-compliant employers.

Benefits of FWA Singapore

The tripartite guidelines for FWA Singapore aim to create a more balanced and productive work environment for both employers and employees. 

For employers

Enhanced employee engagement: Flexible working supports job satisfaction. It benefits employees by improving work-life harmony, which also extends to mental well-being.

Reduced cost: With more and more employees working remotely or on flexible schedules, companies can save on expenses like office space, utility bills, and equipment. 

Access to wider talent pools: 80% of job employees consider flexi work arrangements as a deciding factor when evaluating job offers. Offering FWA might just be what you need to attract diverse and top talent for your organization. 

For employees

Better work life balance: When individuals work flexibly, they have autonomy and greater control over their work. Employees can remain motivated and efficient because they can manage their responsibilities better on the personal front as well as in their careers. 

Improved productivity: A flexible working environment leads to happy and motivated employees. Engaged employees tend to produce better performance, which leads to increased efficiency for the company. 

Greater talent attraction and employee retention: As per recent studies, 74% of employees have stated that they would prefer to leave their current jobs and work for an organization that offers remote work options. Additionally, 79% of respondents said that they would be more loyal to their employers if they were presented with flexible work options. Flexible working allows employees to achieve better work-life balance, leading to higher job satisfaction. Satisfied employees are more likely to remain with their current employer rather than seek opportunities elsewhere.

Employer’s Obligations for FWA Singapore

Establish a process for employees to formally request FWA

In order to implement an effective flexible working arrangement in an organization, employers must set up a standardized process for employees to formally request FWA Singapore. 

They should provide employees with a designated channel or system, such as an online portal or paper-based form, to submit their flexi work arrangements requests.

According to the tripartite guidelines, if the options above aren’t available, that is, if the employer doesn’t have stipulated requirements or a process for their employers to make a formal request, they should consider these next steps:

1. The request must be in writing.
2. The request should contain the following information: 
   • Date of the request
   • The FWA requested, along with its expected frequency and duration
   • Reason for the request
   • Requested start date and end date (if relevant)

Omni Tip: It’s important to note that if the employee fails to meet the requirements above, the request will not be considered and will not be covered by the tripartite guidelines. 

Consider all FWA requests fairly based on reasonable grounds and provide response within two months 

To eliminate bias and discrimination during the consideration phase, employers should set up an evaluation process that reviews requests fairly and objectively. 

Under the guidelines, employers who receive a formal FWA Singapore 2024 request should provide a written decision within 2 months of receiving the request.

Provide written reasons for rejecting the request

Employers can reject requests on the grounds that it will result in a significant decline in productivity, a significant increase in cost, or that it is not feasible given the nature of the work. They are encouraged to provide alternatives instead. Rejection should be done in a transparent and fair manner with written reasons.

Best Practices for Developing Your FWA Singapore Policy

1. Be transparent and use clear communication

A transparent FWA Singapore policy with clear communication is key. The policy should outline available FWA options, eligibility and limitations, and the request process. 

It’s important to ensure that your FWA Singapore policy is easily accessible by employees, which can be done by incorporating it into your onboarding process or employee handbook. Using clear, concise language and open communication through Q&A sessions allows for questions and builds trust within the organization. 

2. Ensure fair and consistent FWA Singapore considerations

FWA Singapore requests must be evaluated in a just and unbiased manner, following the established guidelines set by the Singaporean government. A way to ensure this is to establish procedures with a defined set of criteria used to evaluate the flexible working arrangement requests. 

While evaluating FWA Singapore requests, employers should engage in open communication with employees, discuss any potential challenges or concerns, and explore alternative solutions that may meet both the employee’s needs and the organization’s requirements. 

Ultimately, the decision to grant or deny an FWA request should be made in a transparent and fair manner, taking into account the interests of both parties.

3. Supportive FWA implementation

It’s important to provide adequate support to both managers and employees to ensure a successful FWA Singapore implementation.
Technology and resources: With only 52% of employees who work remotely using computers provided by their company, it is important to invest in technology infrastructure and support systems that ensure employees transition seamlessly between office-based and remote work environments. These include access to laptops, secure internet connections, collaboration tools, cloud-based software, or co-working spaces (enabling them to work remotely from remote locations). Communication is a big factor when it comes to managing remote workers; invest also in collaboration tools such as Slack and Zoom to facilitate this process.

Read next: Slack Tips and Tricks for More Productive HR Teams

Performance management: To help your employees grow in their role and succeed while navigating flexi work arrangements, it is important to set clear goals from the onset. Alongside these goals, outline performance metrics and expectations for what achievement looks like. This helps to maintain accountability and ensure that business objectives are met. Additionally, feedback is key during this process. Schedule regular 1-on-1 meetings to discuss goals, progress, and challenges. Employees may encounter obstacles or challenges while working under FWA Singapore conditions. Employers must build a strong culture where workers can openly communicate with their managers. This ensures they receive the right intervention and support. 

Training and support: Offer training programs or workshops for both employees and managers on FWA Singapore policies, procedures, and best practices to ensure that everyone understands their rights, responsibilities, and the expectations surrounding FWAs. You can also provide guidance and resources for managers on how to effectively manage remote teams, communicate expectations, and address performance issues in a remote work setting.

4. Monitor and evaluate your FWA Singapore policy regularly

Regularly reviewing and updating your FWA policies and practices to make sure they remain relevant, fair, and aligned with the organization’s mission and goals. This helps to make adjustments to address any issues or concerns that arise. 

5. Additional considerations

Foster a positive workplace culture that embraces flexibility, trust, and open communication: A culture of trust and flexibility between employers and employees is important for FWA to work for both parties. 

Ensure compliance with regulations: Labour laws, regulations, and industry standards related to FWA Singapore may change. It is important to adjust your policies to remain compliant with these laws and mitigate potential legal issues.

Implement proper data security measures: All devices that connect to your company’s network must be secure. Implement data security measures to protect sensitive information and ensure compliance with data protection and regulation. Consider remote access VPN solutions to prevent hackers from accessing sensitive information. Additionally, add extra layers of security, such as multi-factor identification, SSO, and anti-virus software, to defend against cyberattacks and malware.

Communicating Your FWA Singapore Policy

Developing a comprehensive policy document

Ensure accessibility (employee handbook, HR portal, internal knowledge base): Document the organization’s FWA Singapore policies, procedures, and decisions to ensure consistency and transparency. This helps prevent misunderstandings and provides a reference point for both employers and employees. 

Ensure that the FWA Singapore policy is easily accessible by including it in the employee handbook, HR portal, and internal knowledge base. Additionally, keep the language concise and clear so that it’s easily understandable by all. 

Omni Tip: Consider translating the FWA Singapore policy into different languages or formats to cater to your diverse workforce.

Launch an awareness campaign

Company-wide email: Send out a company-wide email announcing the launch of the FWA Singapore policy. Provide a brief overview of the policy, its objectives, and how employees can access the full policy document for more information.

Town Hall announcement: Host a town hall or all-hands meeting to announce the FWA Singapore policy. Use this opportunity to explain the rationale behind the policy, address any questions or concerns from employees, and emphasize the organization’s commitment to supporting work-life balance.

Ongoing reinforcement

Manager training: Managers may lack understanding of FWA policies and procedures, leading to inconsistent evaluation of requests. Provide the right training and guidance they need for evaluation. Ensure they understand the organization’s FWA Singapore policies and procedures and can apply them consistently.

Regular updates: As time goes on, you might need to review and make some changes to your FWA Singapore policy. This is to meet any changes in regulations, employee feedback, or organizational priorities. Communicate these updates clearly to employees and managers to ensure continued compliance. 

Optimizing FWA Singapore for a Happy and Productive Workforce

Managing flexible work arrangements Singapore 2024 requires meticulous attention to legal requirements and thorough documentation—especially when the consequences for misfiling can cause significant penalties and troubles for your organization. You should strive to minimize human error by leveraging automation to ensure accuracy and compliance.

Omni allows your organization to securely and centrally manage employee information and FWA applications to comply with FWA Singapore regulations. Our employee-portal makes it easy for employee’s to retrieve information such as your company’s FWA Singapore policy and documents to request for flexible working arrangements, helping ensure your flexible work arrangement Singapore 2024 management meets the regulations set by the Singaporean government.

Our expert support and assistance is tailored to your businesses unique requirements and local regulations. Book a demo today and learn how Omni can help you streamline your request for flexible working arrangements and expertly navigate FWA Singapore management to ensure compliance for your organization.

For many industries around the world, foreign labor is the backbone of their workforce. And it’s no different in Singapore, where sectors ranging from manufacturing to Information and Technology need a combination of both manual labor and skilled, niche experts.

But an over-reliance on foreign labor can lead to an unbalanced workforce and put the squeeze on local talent. That’s one of the reasons Singapore imposed its Foreign Workforce Levy (FWL), which regulates the number of foreign workers Singapore employers can have, and charges them accordingly. 

The FWL Singapore has a few different components, and the penalties for non-compliance can be stiff. Here, we’ll dive into the components you’ll need to consider, the details of a levy waiver for work permit, and the obligations you’ll need to meet.

What is the foreign worker levy?

The FWL Singapore is a fee employers need to pay when they hire foreign workers holding Work Permits or S Passes. In essence, this levy for work permits is meant to limit the number of foreign workers in Singapore, and incentivize employers to prioritize hiring local talent. 

Despite that, the FWL Singapore isn’t “anti foreign labor” at all–it’s more about striking a balance between local and foreign talent, with rebates and even levy waiver for work permits available for industries that require a great deal of manual labor (like construction).

And the FWL Singapore isn’t only based on the sector of an organization, its rates vary depending on factors like skill level and nationality of the foreign worker. Employers are required to pay the levy for work permit on a monthly basis to the Singaporean government. Failure to do so will incur penalties or legal repercussions—something you’ll definitely want to avoid if you’re hiring foreign labor. That’s why understanding the FWL Singapore is essential as it will directly affect your salary budget and hiring decisions.

Read next: HR’s Guide to Singapore Hiring

What are the factors affecting FWL Singapore?

As we mentioned above, the FWL Singapore has a lot of factors that determine how much you pay. 

Sector

Different industries have different levy for work permit rates based on the sector’s demand for foreign labor and its impact on the local workforce. For example, sectors that require specialized skills or expertise (like technology and healthcare) will have higher levy rates to encourage employers to hire local talent and invest in training programs.

On the other hand, industries facing labor shortages or rely heavily on foreign manpower, like construction and hospitality, will have lower levy rates to support their workforce requirements.

Worker’s skills

The FWL Singapore rates will differ based on the skill level of the foreign worker you’re looking to hire, with higher-skilled workers typically subject to lower levy rates. Skilled professionals, such as engineers or IT specialists, may earn higher salaries and possess in-demand skills, leading to lower FWL Singapore payments.

Monthly salary

The FWL Singapore rates vary depending on the monthly salary of a foreign worker, with higher salaries frequently associated with lower levy rates. If you’re offering competitive salaries to foreign workers, you’ll probably benefit from lower levy obligations, as higher wages reflect your commitment to hiring skilled and experienced professionals who contribute positively to the Singaporean economy.

Dependency ratio ceiling (DRC)

The DRC refers to the maximum permitted ratio of foreign workers to the total workforce in your company. If your organization exceeds this ratio, you might face higher levy rates meant to deter your company from hiring excessive foreign labor. By imposing limits on the number of foreign workers (relative to local talent) in a company, Singapore aims for a balanced workforce which safeguards job opportunities for its locals.

With these factors in mind, you can plan your hiring strategy for a cost effective and balanced workforce. While it may seem counterintuitive, spending more to hire skilled employees at higher salaries can be a viable strategy for keeping FWL Singapore costs reasonable, and accessing high-caliber foreign talent.

What are employer obligations for FWL Singapore?

As an employer in Singapore, you are subjected to several different obligations dealing with the FWL Singapore, put in place by the government to ensure compliance with local labor laws, and promote fair work environments. Key examples include:

Timely payment

Your organization will be responsible for promptly paying the FWL Singapore via a General Interbank Recurring Order (GIRO), usually on a monthly schedule. Failure to meet payment deadlines will result in fines or even legal consequences, so making sure your company pays its levy for work permits on time should be a top priority.

Record keeping

Your organization will also need to maintain accurate records about the employment of foreign workers, including details of their work permits, residency status, and levy for work permit payments. These records are essential documentation for regulatory compliance audits and help maintain transparency in labor management practices. Having a system like an HRIS which centralizes record keeping while keeping documents secure and accessible is a great addition to your tech kit if you’re employing foreign workers in Singapore.

Compliance with DRC

As we noted above, you’ll also need to pay careful attention to the DRC.  By measuring the ratio of local to foreign workers, and abiding by the prescribed ratio, you’ll maintain a balanced workforce composition and avoid the fines and penalties associated with employing an excess of foreign labor.

By fulfilling these obligations, your organization will demonstrate its commitment to upholding ethical labor practices, maintaining regulatory compliance, and contributing positively to Singapore’s economic and social fabric. 

The key is proactivity—rather than wait until the last minute to pay the FWL Singapore, or scramble to react to an audit, HR tools can help you stay ahead of the game and keep close tabs on the makeup of your workforce, payment schedules, and essential documents.

Who is eligible for FWL Singapore rebate?

If your organization operates in the Construction, Marine Shipyard, and Process (CMP) sectors, you may be eligible to levy waiver for work permit when it comes to paying FWL Singapore. 

This rebate scheme aims to provide financial relief to employers in industries with higher reliance on foreign labor, with the intention of supporting Singaporean business sustainability and competitiveness. Here’s a breakdown of eligibility criteria and rebate details:

Rebate applicability: The levy waiver for work permit is applicable exclusively to employers operating within the CMP sectors listed above. These industries often require a significant workforce, including foreign labor, to meet the demands of their day to day operations and project requirements.

Work permit categories: The rebate amount or levy for work permit varies depending on the specific work permit category of foreign employees hired by an organization. The two primary categories include:

• Work permit holders: Employers who hire foreign workers under the Work Permit scheme may qualify for FWL rebates based on government criteria and sector-specific considerations. For example, the rebate or levy waiver for work permits you’d qualify for in the construction sector would likely be higher due to the labor-intensiveness of construction work. Similarly, in the manufacturing sector, rebates might be higher for employers that require a greater deal of manual labor and might have better FWL rebates than those that rely on automation. 
• S pass holders: The details are similar for S Pass holders—organizations employing foreign professionals, technical personnel, and skilled workers under the S Pass scheme may be eligible for FWL rebates or levy waiver for work permit subject to sector-specific guidelines and compliance requirements. In the IT sector, these might include rebates for companies focused on training and education, or hiring highly niche specialists from foreign talent pools.

The Singapore government offers rebates and levy waivers for work permits tailored to specific sectors and work permit categories, aimed to help with the financial burden on employers in industries vital to the nation’s economic growth and development. 

These targeted incentives and levy for work permit support the Singapore government’s workforce management objectives while also building industry resilience and sustainability, despite a diverse and change-prone business landscape.

What are the penalties for FWL Singapore?

Singapore is known around the world for its relatively strict legal system, and this extends to its expectation of FWL Singapore compliance. Failure to meet these requirements could result in several different penalties for organizations hiring foreign labor in Singapore. Here are the penalties you’re going to want to avoid when working with the FWL Singapore:

Late payment penalty

If your organization fails to make on-time FWL Singapore payments, it will incur late payment penalties. You’ll be charged a late payment penalty of 2% per month on your outstanding payment or a minimum of $20, whichever is higher. The total late payment fine is capped at 30% of the outstanding levy.

Cancellation of work permits

In cases of serious or repeated non-compliance with FWL Singapore regulations, authorities have the ability to cancel the work permits of foreign employees working for the offending employer. Work permit cancellations have significant implications for both employers and affected workers, including potential disruptions to operations and employment status. Compliance with FWL Singapore is extremely important as it can put your workforce and their livelihoods in jeopardy.

Denial of future work permit applications

For organizations found to be in serious or repeated breach of FWL Singapore regulations, they could face restrictions or outright denial when applying for future work permits. Authorities tend to scrutinize applications from non-compliant employers more closely, considering past compliance records and how well they’ve stuck to regulatory requirements. In other words, it is important to ensure compliance to FWL Singapore regulations as it might make it more difficult for your organization to hire foreign labor on an ongoing basis.

Ban on applying for work permits

In the most severe cases of non-compliance or persistent violations, authorities may impose bans on employers, preventing them from applying for work permits altogether. These bans serve as the most intense deterrent against repeat offenses and underscore the seriousness of regulatory breaches. 

If your organization hires foreign workers in Singapore, prioritizing compliance with FWL Singapore regulations is crucial. Adhering to payment deadlines, fulfilling reporting obligations, and staying informed about relevant changes to regulations are all essential steps to maintaining compliance.

Stay Informed and Compliant with Omni

It is clear that the FWL Singapore is a crucial aspect of managing foreign manpower and you as an employer must comply with levy for work permit regulations to avoid risk of fines and ensure smooth business operations. 

Omni’s all-in-one HR software provides a comprehensive solution for modern businesses to manage their workforce effectively, including foreign workers. By using Omni, you can automate calculations, ensure timely payments, and maintain compliance with Singapore’s regulations. With payroll solutions that support SGD and pay schedules, Omni offers an entire suite of solutions to make your payroll system Singapore seamless. 

Book a demo with us today and we’ll walk you through the platform’s capabilities and demonstrate how Omni can transform your HR processes, saving you time, reducing administrative burdens, and enhancing overall efficiency.

Workplace accidents have become prevalent, as statistics show that every 15 seconds, a worker suffers from a work-related accident globally. In Singapore, organizations witnessed 11,222 workplace injuries reported in the first quarter of 2023, which is in accordance with the workplace safety and health report released by the Ministry of Manpower.

Recognizing the critical importance of safeguarding workers’ well-being, the nation prioritizes workplace safety and health through a comprehensive legal framework – the Workplace Safety and Health Act (WSH). This Act isn’t just about safeguarding employees; it empowers businesses to cultivate a culture of safety, fostering a win-win situation for all stakeholders.

This Workplace Safety and Health Act Guide serves as a resource for employers, employees, and modern HR teams who seek to understand how to navigate their WSH-mandated rights and responsibilities.

What is Singapore’s Workplace Safety and Health Act?

The Workplace Safety and Health Act (WSH) is a legislation set by the Singapore government to regulate health and safety in the workplace. 

The Act requires employers to provide a safe workplace, a process of investigation of complaints of unfair practices, and a process of workplace inspections. 

Who is covered by the Workplace Safety and Health Act?

The Workplace Safety and Health Act covers the following:

• Safety, health, and welfare of employees at the workplace.
• Responsibilities of stakeholders: The WSH Act outlines the responsibility of each stakeholder group — such as employees, employers, occupiers, and self-employed — in relation to maintaining and promoting a safe company culture. They are required to take practicable measures to ensure safety and health in the workplace. 
• Hazardous substances: These are substances that pose a significant risk to a worker’s health and safety. Some of which include carcinogens, explosives, irritants, etc. By regulating and managing the use, handling, and disposal of hazardous substances in the workplace. The act aims to minimize these risks and ensure a safe working environment for employees. The Workplace Safety and Health Act has provided a list of these substances on their website. 
• Machinery and equipment: In today’s world, workplaces utilize machinery and equipment to improve efficiency. The Workplace Safety and Health Act covers the following equipment and machinery. This requirement is in place to prioritize the safety of workers and prevent accidents or injuries caused by unsafe machinery and equipment in the workplace. Compliance with the Workplace Safety and Health Act helps to reduce risks, protect employees, and promote a safe working environment.

Why should occupational safety be a top priority for employers?

In a bid to achieve a safer and more productive workplace, the Singaporean government published a WSH 2028 report outlining strategies and outcomes that will be taken to achieve this goal.

The said report shows that in the past, there have been more workplace accidents linked to dizziness or loss of consciousness that stem from poorly managed chronic conditions such as diabetes, hypertension (high blood pressure), and hyperlipidemia (high LDL cholesterol).

Ill health and poor health management in the workplace impact safety, and this is because employees who experience dizziness or loss of consciousness due to poorly managed chronic conditions are at risk of injury to themselves and others. These accidents can result in serious harm, medical expenses, and potential legal liabilities for the employer. 

In addition, workplace accidents can lead to productivity loss as these accidents disrupt workflow. Employees are therefore unable to work if they suffer from injuries or health-related issues. The reputation of the company is tarnished when there is negative publicity surrounding safety accidents. This can deter potential employees, clients, and investors. 

These issues can be prevented by making employee health and safety a top concern. Prioritizing safety demonstrates care for employees’ well-being, fosters a positive work culture, and improves morale. Employees are more likely to remain loyal to companies that prioritize their safety and well-being. They can also mitigate legal issues and costs, as failure to comply with this legislation can result in paying fines, and in some cases, imprisonment. 

Overall, prioritizing occupational safety not only protects employees from harm but also benefits employers by avoiding financial losses, maintaining a positive reputation, and fostering a productive work environment.

Relevant reads: Leveraging Singapore’s Mental Well-Being Programs to Improve Employee Mental Health

Key Duties of Stakeholders

The Workplace Safety and Health Act has outlined the duties of each stakeholder, holding them accountable to the most stringent standards for ensuring a safe and healthy workplace, these include: 

Employers

• Risk management: This involves identifying risk hazards and implementing control measures to mitigate the risk to the health and safety of your workers.
• Safe work procedures: In line with the Workplace Safety and Health Act, employers are responsible for making the workplace safe by following safe work procedures.
• Training and information: Training and information empower employees to recognize and respond to workplace hazards effectively, enhancing their safety awareness and preparedness. Employers should provide adequate training materials and information on occupational health and safety procedures.
• Supervision and maintenance: Employers are to ensure proper supervision of work activities and maintain equipment, machinery, and facilities in a safe working condition. This helps to prevent malfunctions, breakdowns, and accidents, preserving a safe working environment for employees.
• Incident reporting: The Workplace Safety and Health Act states that there should be systems set up for reporting and investigating workplace incidents, injuries, near misses, and hazards to prevent such occurrences in the future. Employers should work towards creating an environment where every employee can freely discuss safety problems and report incidents. 

Employees

• Adhere to safe work procedures: Employees are to follow established work procedures and protocols for each task or activity. They should also be allowed to take responsibility for their own safety and the safety of their coworkers by adhering to safety rules at all times.
• Use of Personal Protective Equipment (PPE): The Workplace Safety and Health Act states that employees are also required to use appropriate personal protective equipment to protect themselves from workplace hazards. This minimizes the likelihood of injuries or exposure to harmful substances. 
• Report unsafe conditions: If there is any occurrence of hazards, unsafe conditions, or near misses, employees should report to the supervisor or safety personnel available. 
• Take reasonable care: Employees are to exercise reasonable care for their health and safety and also to that of others who may be affected by their actions or omissions in the workplace. This also includes deliberate actions towards following safety instructions and guidelines provided by supervisors. In addition, to also improve their safety knowledge and skills, they should participate in safety and training programs. 

These duties are essential for promoting a culture of safety, preventing accidents and injuries, and ensuring compliance with occupational health and safety regulations. Collaboration between employers and employees is crucial to creating and maintaining a safe and healthy work environment.

What is the right to refuse unsafe work?

The right to refuse unsafe work means you, as an employee, can say no to a task if you reasonably believe it poses a danger to yourself or others. This is protected by the Workplace Safety and Health Act.

Here, we’ll break down what this means and the steps to take if you encounter an unsafe situation at work.

Employee’s right

If an employee perceives that their health and safety are threatened in the workplace, they reserve the right to report any unsafe conditions to their supervisors, health and safety personnel, or authorities. According to the Workplace Safety and Health Act, employees have the right to request information about occupational safety and health standards if they aren’t sure what they’re entitled to.

Work refusals for safety and health reasons may be carried out by one worker acting alone, or they may be taken by any number of workers. It is important to know that reporting unsafe work isn’t just about protecting yourself; the lives of other workers are also at risk when unsafe practices go unnoticed in the workplace. This is an important step that leads to an improved work environment for every employee to thrive and feel safe.

Employees might be unwilling to take action due to the fear of being terminated. This is where the WSH Act comes in. It protects employees from retaliation, discrimination, or punishment by their employers.

Conditions for refusal

• Reasonable belief of danger: Employees have the right to refuse work if they genuinely believe that performing the task or being in the work environment poses a threat to their health or safety. This belief must be reasonable, meaning there should be evidence or circumstances that support the concern. For example, if there is a clear risk of injury due to malfunctioning equipment or hazardous conditions, the belief would likely be considered reasonable.
• Reporting the refusal: Once an employee decides to refuse unsafe work, the next step would be to report this refusal to their employer or immediate supervisor. This reporting ensures that the employer is aware of the situation and can take appropriate action to address the concern. Reporting procedures may vary depending on company policies or relevant regulations, but they often involve documenting the refusal and the reasons behind it. This documentation is crucial for maintaining transparency and accountability in the workplace. 

Employer’s obligation

• Investigation: The employer’s response to this right is to make sure the work environment is safe and healthy. One way to do this would be to investigate as soon as they receive the report. In the process of investigation, they should address any risk or hazard that may arise to respect the worker’s decision to refuse work and not to retaliate or discriminate against the worker for exercising their right. 
• Addressing the risk: This involves implementing corrective action, which is taking steps to resolve the identified hazard. It could involve implementing new safety measures, providing additional training, or making necessary repairs to equipment or facilities. 
• No reprisals: No employee should be threatened with discipline; instead, the employer must provide them with alternative work that is safe and suitable or pay them regular wages until the incident is resolved. 

General process

The general process involves employees raising concerns when they observe any dangerous, unethical, or illegal acts in the workplace. The employee has the right to refuse unsafe work and report their findings to their employers or supervisors. 

From there, employers can assess the situation, identify the root cause, and determine the next corrective steps. After the resolution of the hazard, employers should reassess the workplace to ensure that the safety concern has been effectively addressed. Follow-up communication with the workers is crucial to confirm that the corrective actions have been implemented successfully. 

What are the penalties for non-compliance?

What happens to employers who fail to adhere to the Workplace Safety and Health Act? 

The Workplace Safety and Health Act has made a provision of penalties that serve as a deterrent against non-compliance. 

This is to hold employers accountable for maintaining safe working conditions. By imposing consequences for violations, the act reinforces the obligation of employers to take proactive measures to prevent workplace accidents and injuries.

Types of penalties

Fines: Companies can face monetary fines for violating safety regulations. The amount of the fine depends on the severity of the offense.

Imprisonment: In severe cases of non-compliance, individuals responsible for safety breaches may face imprisonment.

Determining the penalty

Nature of offense: The severity of the violation and its potential impact on workplace safety.

History of offenses: Previous violations and whether the company has a history of non-compliance.

Degree of culpability: whether the violation was intentional or due to negligence.

Additional consequences

Stop-work orders: Authorities may issue orders to halt operations until safety concerns are addressed, therefore impacting productivity and revenue.

Damage to reputation: Non-compliance can tarnish a company’s reputation, leading to a loss of trust among stakeholders, customers, and the public.

Empowering Employees for a Safer Work Environment

HR managers have their hands full, and the ever changing Workplace Safety and Health Act adds yet another layer of responsibility to their already existing workload. 

Omni’s all-in-one HR solution helps make these tasks streamlined and free of manual error to reduce the administrative burden on HR. Organizations can track and monitor its compliance with Singapore’s safety regulations as well as analyze data to identify and address safety risks.

With Omni’s secure and centralized records, HR teams are empowered to make better decisions, proactive risk management, and continuous improvement in workplace safety practices.

Start your 14-day free trial and learn how Omni can help you remain compliant with regulations like the Workplace Safety and Health Act and reduce your administrative workload for all of your People management needs.