Labor Code Provisions in Singapore
Under the Employment Act, employees are entitled to a range of benefits such as annual paid leave, sick leave, maternity leave, and paid public holidays. As an employer, it’s essential to ensure these entitlements are clearly stated in your employment contracts and fully comply with the Act’s standards.
Minimum Age
To be eligible for employment, a person must be at least 13 years old. However, the age restriction varies based on the sort of work performed by the employee.
Minimum Wage Payment
In Singapore, there isn’t a mandated minimum wage for all employees. Instead, salary is typically agreed upon between the employer and employee during negotiations. However, employers must ensure salaries are paid at least once a month, and within seven days after the end of the wage period. If there’s any overtime pay involved, it should be settled within 14 days after the end of the salary period.
Working Hours and Overtime Law in Singapore
The following are the legal requirements for working hours and overtime:
- Employees are only allowed to work a total of 44 hours per week or eight hours each day
- Employees are not allowed to work for more than six hours without taking a break
- Except in particular circumstances such as an actual or threatened accident, national defense or security, or other unanticipated events that resulted in stopped work, employees cannot work more than 12 hours per day – including overtime
- Employees on the shift are not permitted to work more than 12 hours a day under any circumstances
- Every week, employees are entitled to a non-working, unpaid rest day
- Two rest days should not be separated by more than 12 days
However, the rules around working hours and overtime don’t apply to employees earning more than SGD 2,600 per month. For higher earners, working hours and arrangements are typically agreed upon between the employer and the employee. In practice, usual working hours in Singapore are from 9 a.m. to 6-7 p.m., with most employees working nine to ten hours on weekdays, and some working half-days on Saturdays. Paid Annual Leave
If your employee has worked for at least three months, they are entitled to paid annual leave under the Employment Act. The number of days they are eligible for depends on how long they’ve been with your company. The longer the service, the more leave they can take.
Singapore Sick Leave Rules
The statutory requirement and common practice for sick leave and hospitalization leave in Singapore are as follows:
Minimum number of months in service
Minimum number of months in service
Paid hospitalization leave (including sick leave)
Minimum number of months in service
Paid hospitalization leave (including sick leave)
Upon return to work, the employee is also required to present a medical certificate from an appointed company doctor or any doctor from an approved hospital.
Public Holidays
According to the Act, Singapore employees are entitled to 14 paid public holidays for 2023. If the employee is compelled to work on a public holiday, the employer shall compensate him or her with an extra day’s pay or a day off in lieu. If a public holiday falls on a rest day, the following working day is treated as a paid holiday.
Health Insurance
Private health insurance isn’t a requirement under the MOM Employment Act. Singapore Citizens and Permanent Residents (PRs) are automatically covered by MediShield, which is a basic, low-cost insurance plan. Employees’ MediSave accounts, funded through a portion of their CPF contributions, allow them to pay for medical expenses for themselves and their dependents.
That said, many employers in Singapore choose to offer additional private health insurance as a benefit. This is especially common among larger companies, though smaller businesses may not always provide this perk.
For companies hiring foreign workers with an Employment Pass, it’s also quite common to offer private health insurance as part of the benefits package, providing extra coverage and peace of mind for their employees.
Singapore’s Parental Leave
Female employees who have been employed for more than three months are subject to regulatory obligations and customary practice. They are entitled to paid maternity leave as well as the following benefits:
- A maximum of 16 weeks of leave is available to eligible female employees.
- Employers are not allowed to fire female employees who are on maternity leave.
- Employers are expected to pay maternity leave in full if they give a notice of dismissal without cause within three months of the leave.
- Female employees who have worked for more than three months and have a kid under the age of seven are eligible to six days of paid childcare leave each year.
Singapore’s Employment Law on Termination
By terminating the contract of service, either the employee or the employer can cease the employment relationship. Termination may occur for the following reasons:
- The employee resigns; the employer fires the employee; or the employee is fired.
- When a project or contract period is over, the contract conditions have expired.
- Both parties must adhere to the termination terms and circumstances outlined in the service contract. If this process isn’t specified, the EA’s provisions should be followed.
Notice Period
In Singapore, the number of notice days for terminating an employment contract is not set by law, so it depends on what was agreed upon in the contract. Both employers and employees are typically bound by the same terms.
Either party can end the contract by giving written notice or offering salary in lieu of notice. However, in cases of serious breach of contract, either party can terminate employment without notice. Employees may also use their accrued annual leave to offset the notice period.
It's common practice in Singapore to request a two-week notice period during probation and a one-month notice once the employee has been confirmed.
Layoffs, Retrenchment or Downsizing
The following are the legal criteria for employees earning less than SGD 2,600 per month:
- On the last day of work, the employer is expected to pay the employee’s wages and benefits
- The length of the notice period will be determined by the employment contract
- Retrenchment benefits are available to employees who have worked for the organisation for at least three years. However, the Employment Act makes no provision for the form or amount of such benefits, which must be agreed upon by both the employer and the employee
- Retrenchment benefits are not available to employees who have worked for less than three years
- Retrenchment benefits are frequently calculated based on the company’s size and financial situation in Singapore
Central Provident Fund Contributions (CPF)
The following are the regulatory requirements and typical practise for the required retirement savings plan:
- CPF is mandatory for Singapore citizens and permanent residents, and both the employer and the employee must contribute every month
- For international employees with an Employment Pass or Work Permit, CPF is not required
- Employers can contribute up to 17 percent of their salary to the CPF, while employees can contribute up to 20 percent. Age, PR status, and other factors can all influence the rate
- On the 14th of the next month, employers must submit the monthly payment for both employers and employees
Non Statutory Benefits or Perks
Employees in Singapore can also receive additional non-statutory perks at the discretion of their employers.
The following are a few of the most common:
- Private Medical Insurance
- Per Diem for Travel-related jobs
- Relocation Package – Expat packages that include shipping fees, airfare, housing, utility bills, and childcare and education fees for the children. These packages are divided into three categories: full expat, semi-expat, and full local. Employees are also temporarily housed in hotels or service apartments paid for by the employer if housing is not readily available.
- Employee Stock Purchase Plans – In some organisations, this is a benefit that is normally only available to top staff.
- Corporate memberships
- Continuing education
- Leisure activity coupons
- Gym memberships
- Telecom plans
Penalties
If a company fails to comply with the provisions of the Employment Act, it could face serious consequences. For each violation, the company could be fined up to S$5,000, and managers found guilty could face up to six months of imprisonment, or both. For repeated infractions, the fines can go up to S$10,000, with a prison term of up to one year, or both.
In terms of employment contracts, it’s common practice in Singapore to require two weeks’ notice during the probation period and one month’s notice once the employee has been confirmed.