Insights from Global Mobility

Singapore: Proposed changes to the Act include removal of cap

October 8, 2018

In brief The Singapore Ministry of Manpower has proposed significant changes to the Employment Act (EA) including:

 Removal of the salary cap for the coverage of core employment provisions

 Increased salary threshold for non-workmen

 Authorization of the Employment Claims Tribunal to hear wrongful claims.

If approved, these changes are scheduled to take effect from April 1, 2019. Employers have less than one year to review the changes against their current policies and practices to ensure compliance and quantify the implication to the organization and its employees.

In detail It is expected that 430,000  Maternity protection and Removal of the salary cap PMETs will enjoy greater childcare leave for core protection under the proposed changes.  Protection against wrongful Currently, the EA provisions dismissal only apply to rank and file Among other provisions, the EA employees and professionals, requires employers to provide  Preservation of existing managers, executives, and this group with, as a minimum: terms and conditions in the technicians (PMETs) earning up event of an employment to S$4,500 per month.  Seven days of paid annual transfer following a leave (increasing with years corporate restructure. The proposal to remove the of service) salary cap will mean the EA The EA specifies the minimum applies to all employees,  11 paid public holidays level of benefits that employers irrespective of their income level must provide to their  14 days of paid and (except for public servants, employees. Employers should 60 days of paid seafarers, and domestic validate that they meet this workers, who are protected hospitalization leave baseline prior to the proposed under specialist legislation).  Timely payment of salary changes coming into effect on April 1, 2019.

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While reviewing compliance with the Changes to the dispute resolution Coverage of EA changes minimum requirements, progressive process It should be noted that the EA extends businesses also should review key Disputes related to wrongful to all employees, including foreigners People Analytics indicators to dismissals and salary claims currently under an Employment Pass, S-Pass, as measure the effectiveness of their are mediated by MOM and the well as Work Permit holders. overall compensation and benefits Employment Claims Tribunals (ECT) structure in recruiting, retaining, and respectively. Organizations need to review the motivating staff. compensation and benefit structure of To give employers and employees a all employees when considering the Increasing the salary cap of non- ‘one-stop service,’ it has been changes to be made in order to be workmen proposed that both wrongful compliant with the proposed EA Additional protection is accorded to dismissals and salary-related disputes changes. certain groups of employees will be mediated by the ECT. particularly ‘non-workmen’ (white The takeaway collar workers who are not PMETs, Extending the reach of the The proposals have not yet been such as clerks and receptionists, who Employment Act, while also passed into legislation, however earn up to S$2,500 per month), by consolidating the employee tribunal employers should begin assessing Part IV of the EA, which covers the system, means employers should their operational readiness for the hours of work, rest days, and assess their end-to-end HR policies, new rules by doing the following: pay. processes, and practices to ensure these are fair and sufficiently robust to  Review the profile of employees to This S$2,500 salary cap will be raised withstand scrutiny. to S$2,600. It is expected that this validate whether their current change will impact 50% of Singapore’s Each step of the , , benefit provisions meet the workforce. appraisal, promotion, and termination proposed changes as a minimum processes should be clearly Currently the payable documented. The language in  Check end-to-end HR processes for non-workmen is capped at a salary employment contracts should be and whether they are sufficiently level of $2,250. This base salary used reviewed, and the guidance available fair and robust to minimize for overtime pay calculation for non- in HR manuals/employee handbooks employee disputes workmen also will be revised from should be validated to ensure they are,  Implement any changes before $2,250 to $2,600 per month. This at a minimum, compliant with the should give greater benefit to EA. April 1, 2019. approximately 100,000 workers.

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Let’s talk For more discussion on the above, please contact your regular Global Mobility Services engagement team or one of the following team members:

Global Mobility Services – Singapore

Sakaya Johns Rani Mark Amatya Vimala N Subramani +65 9088 8347 +65 9628 3146 +65 9817 0489 [email protected] [email protected] [email protected]

Global Mobility Services – Peter Clarke, Global Leader +1 (646) 471-4743 [email protected]

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