Understanding the Singapore Employment Act

For HR professionals in Singapore, understanding the Employment Act Singapore is crucial. It is perhaps the most important labor law in the country, and covers everything from wages to working hours. Staying compliant with its regulations is essential.

That said, the Act is subject to frequent updates (with the most recent change implemented in January 2024). Staying up to date and interpreting not only the mandatory regulations, but also the common practices it outlines is important for HR success in Singapore.

In this guide, we will delve into the specifics of the Employment Act Singapore, everything from who it applies to, key provisions to be aware of, and tips for staying compliant. 

Who is Covered by the Employment Act Singapore?

The Employment Act Singapore covers all employees, regardless of nationalities, except for certain groups such as managers and executives, domestic workers, seafarers, and public servants. The Act covers employees who:

  • Work under a contract of service (written or verbal.)
  • Employed entirely or partially in Singapore 
  • Workers engaged in manual labor earning a basic monthly salary of no more than S$4,500, other workers earning a basic salary of no more than S$2,600. 

The Employment Act Singapore provides basic protections for the employees it covers, including regulating working hours, overtime pay, rest days, annual leave, and the regulations around terminations or lay-offs. Knowing the specifics of The Act, and staying up to date with any changes or additions should be a top priority if you’re an HR professional working in Singapore.

Key Provisions of the Employment Act Singapore

Employment Act Singapore

The Employment Act Singapore has many different provisions that are put in place to protect the rights of employees working in Singapore. They can broadly be placed into two categories. These are:

Core provisions

  • Employment terms and conditions: The Employment Act Singapore regulates that employers must provide written employment contracts to employees within the first two months of their employment, and they should outline the terms and conditions involved, such as job scope, working hours, and salary details.
  • Working hours: It also specifies the maximum number of working hours per day and week, including rest day requirements and overtime pay entitlements for work beyond stipulated hours. For most employees, this comes out to 9 hours per day (44 hours per week) with any work in excess of that being considered overtime. 
  • Annual leave: The Act mandates minimum annual leave entitlements for employees based on their length of service, ensuring they receive adequate rest and recreation. After employees have served three months, they are entitled to seven days of leave, which increases one day per year of service up to the maximum 14 days. Employers are also required to keep accurate records of employees’ attendance and overtime. While the statutory standard working hours are regulated, many organizations also offer flexible or remote work arrangements, such as telecommuting or flexible schedules, to accommodate their employees’ needs and promote work-life balance.
  • Public holidays: It also regulates employee entitlement to paid public holidays and payment arrangements for work performed on such days. In Singapore, there are a total of 11 public holidays.
  • Sick leave and medical benefits: The Employment Act Singapore includes provisions for sick leave entitlements, including certification requirements and medical benefits for ill employees. Employees who have served at least 3 months of service and who provide 48 hours’ notice of absence are entitled to 14 days of sick leave and 60 days of paid hospitalization leave. It’s important to note that the 60 days of paid hospitalization leave includes the 14 days of sick leave unless the employee has worked for 6 months or more, in which case they receive the full entitlement. 
  • Termination of employment: The act also regulates termination procedures, including notice periods, termination without notice, and payment of salary in lieu of notice.

Read next: HR’s Guide to Managing Singapore Employment

Part IV Provisions

  • Additional protection for manual laborers: Part IV of the Employment Act Singapore provides added protections for workers engaged in labor-intensive jobs. These include regulations on working hours, rest intervals, and overtime pay rates.
  • Benefits for non-manual laborers: It also includes provisions related to benefits such as annual leave, public holidays, and sick leave for workers making less than S$2,600 per month, ensuring fair treatment for all types of employees.

These key provisions of the Employment Act Singapore serve as the foundation for regulating employment and promoting a healthy and fair work environment for all employees. 

Statutory Requirements and Common Practices

While the Employment Act makes certain regulations legally binding, it also outlines some common practices most employers choose to abide by, and encourages other Singaporean organizations to follow suit. Here’s what you should consider, aside from the core provisions mentioned above:

  • Salary and wages: While there’s no regulated minimum wage in Singapore, companies who wish to access a variety of government subsidies need to abide by the Local Qualifying Salary for their employees of at least S$1,400 per month. While that is generally a baseline, many employers in Singapore offer competitive salaries and benefits packages to attract and retain talent, which may include performance bonuses, incentives, and allowances such as transportation or meal subsidies.
  • Health insurance: While the Employment Act does not mandate health insurance coverage for employees, many employers offer comprehensive medical insurance plans as part of their employee benefits package to provide financial protection and access to healthcare.
  • Maternity and childcare leave: Under the Employment Act, mothers of newborn Singaporean citizens are entitled to 16 weeks of paid maternity leave, while mothers of non-Singaporean citizens receive 12 weeks of unpaid leave. Fathers are eligible for four weeks of leave, which must be taken within 12 months of their child’s birthdate. Many Singaporean employers voluntarily offer an additional two weeks of parental leave. Employers can apply to the government for reimbursement for these maternity leaves once they have been provided.

Learn more: HR’s 2024 Guide to Singapore Maternity Leave

  • Probation period: While The Act doesn’t mandate a probation period, it allows for one, and it’s very common for employers to take a three to six month period where they assess the skills and fit of their new hires before committing to them fully.
  • Employment termination: The Employment Act Singapore regulates the termination of employment relationships, including notice periods, severance pay, and the circumstances under which employment can be terminated. The most important item The Act stipulates is that the employment contract originally offered to the employee is followed closely. 
  • Retrenchment, layoffs, downsizing: In cases of retrenchment, layoffs, or downsizing, employers must comply with the statutory requirements regarding notice periods, severance pay, and the provision of support services to affected employees. These include notifying the Ministry of Manpower (MOM), and abiding by the terms of employment contracts. Although not mandatory, the MOM website strongly recommends offering two weeks to one month of salary for every year of service is a common and likely expected practice for employees facing retrenchment. 
  • CPF Contributions: The Central Provident Fund (CPF) is a mandatory social security savings scheme for both Singaporean employers and employees. Employers are required to make CPF contributions for their eligible employees based on specific contribution rates set by the CPF Board, which vary based on the age of the employee in question.

Non statutory benefits & perks

  • Personal well-being: Employers can and often do provide a variety of wellness programs and initiatives to support their employees’ physical and mental well-being. These can include gym memberships, wellness workshops, counseling services, and employee assistance programs (EAPs).
  • Travel allowance: Most employers looking to stand out in recruiting provide travel allowances or reimbursements to employees for business-related travel expenses, such as transportation, meals, and accommodation. These allowances help keep expenses down for employees who need to frequently travel for business. 
  • Relocation package: For employees relocating for work purposes, many employers offer relocation packages to help with the costs and challenges of moving. These packages include financial assistance for housing, transportation, moving expenses, and settling-in allowances.
  • Employee Stock Purchase Plans (ESPP): ESPPs are programs that allow employees to purchase company shares at a discounted price, often through payroll deductions. These plans enable employees to become shareholders in the company and potentially benefit from its financial performance—sharing in the success of a company is a great way to boost employee engagement and motivation.

Strategies to Stay Compliant with the Employment Act Singapore

As we’ve already laid out, there’s more than a few regulations from the Employment Act Singapore you’ll need to keep in mind. Failing to follow them could lead to fines or legal consequences—something your organization will certainly want to avoid. Here’s some tips to ensure you are compliant:

Leverage HRIS for accurate recordkeeping

Implementing a robust Human Resources Information System (HRIS) will greatly assist in ensuring compliance with the Employment Act Singapore. An HRIS harnesses automation and streamlines many different HR processes, including payroll management, leave tracking, and employee data management. 

By maintaining accurate records of employee information, work hours, salaries, and statutory benefits, an HRIS helps minimize risk and ensures thorough recordkeeping for potential audits. Additionally, it improves operational efficiency, enhances data accuracy and facilitates informed decision making through access to real-time analytics.  

Read next: The 7 Best HR Software Singapore Has to Offer in 2024

Hire a local HR manager

Employing a local HR manager who is well-versed in the Employment Act Singapore and the regulations associated with it is a great idea for ensuring compliance. A local HR manager can provide valuable, first-hand insights and guidance on interpreting the provisions of the Employment Act, as well as other relevant legislation. They can also serve as a point of contact for your employees’ questions and concerns regarding their rights and entitlements under the law.

Seek expert guidance

Given the complexities of employment laws and regulations in Singapore, your organization might benefit from seeking expert guidance from legal professionals or HR consultants specializing in local labor laws. These experts can provide tailored advice on compliance, including interpreting legal requirements, conducting compliance audits, and addressing any gaps or issues before they become a problem. 

Also, it’s a good idea to attend regular training sessions or workshops on employment law updates and compliance best practices to help you and your HR team stay informed and up-to-date on regulatory changes.

Omni Helps HR Leaders Stay Compliant in Singapore

Employment Act Singapore

HR managers have their hands full, and the ever changing Employment Act Singapore adds yet another layer of responsibility to their already existing workload. Tracking and calculating hours, managing employee records, and administering payroll requires a clear, secure, and accurate system to ensure compliant and timely payouts for your employees.

Omni’s all-in-one HR solution helps make these tasks streamlined and free of manual error to reduce the administrative burden on HR. With secure and centralized employee database, HR teams can easily store, update, and communicate employee information across departments and with employees. Our payroll solutions make it easier than ever to calculate accurate employee payments and tax calculations through automation that saves time and reduces errors. And with automated payroll information synchronization, end of month processing becomes a streamlined and seamless effort.

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

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