5 Things You Need To Know About Allowing Your Employees To Take A Second Job

There has been a rising trend of individuals in Singapore taking on side hustles. While side hustles typically entail freelance work, it can also mean taking on another job.

In particular, during the COVID-19 pandemic, the National Wages Council (NWC) encouraged employers to support their employees who are interested to take on a second job elsewhere to cope with a reduced monthly salary.

There’s no reason this should limit an employee from looking for a side hustle and/or a second job today. Here are 5 things you need to know about allowing your employees to take a second job.

Read Also: Guide To Understanding  The Role Of Singapore National Employers’ Federation (SNEF) And Singapore Business Federation (SBF)

#1 Employers Are Encouraged By The Government To Allow Employees To Take On A Second Job

In line with the NWC recommendation, the Ministry of Manpower (MOM) posted a guide on second job arrangements for employers on its website. In short, it states that employers cannot stop employees from taking a second job unless there are: 

  • prohibitions in their current employment contract from taking on other forms of work; and/or 
  • there is a conflict of interest with their current employer.

Even if these conditions are present, MOM encourages employers to waive contractual prohibitions against taking on a second job and to help employees and resolve conflicts of interest where possible.

It also encouraged employees to ensure they can handle both jobs without compromising the interest of either employer and to be transparent about their work arrangement.

#2 Employers Can Help Their Affected Employees Find A Second Job

Though we are out of the pandemic, retrenchments and cost-cutting remains a natural part of the working world. In fact, the latest 1Q 2023 MOM Labour Market Advance Release reported that retrenchments have risen in 3 consecutive quarters.

By helping employees to find an interim or permanent second job, certain employers can find win-win situations, providing less work for less pay, rather than retrench their workers. While this may be painful to any employer, it is likely more demoralising for employees and even put their livelihoods at risk.

Employers can either do this through your own contacts or via the Singapore Business Federation (SBF) and Trade Association and Chambers (TACs) to identify private sector outplacement opportunities. You can:

  • Reach out to your TAC or SBF to get a Job Order Template. Fill it up with details of the outplacement and submit to your TAC or SBF.
  • Check the job postings on Workforce Singapore’s MyCareersFuture and direct your employees to apply for jobs.
  • Work with your TAC or SBF to look out for intra-sector and cross-sector job matching opportunities (including company-to-company matching and individual-to-company matching)
  • Report to your TAC or SBF if your outplaced employees are successfully hired by other companies (presumably to help other such companies with their excess manpower).

Read Also: Retrenching Some Staff VS Pay Cut For All: Pros And Cons Of Each Cost-Saving Method

#3 What The First Employer Needs To Know

The first employer continues to be responsible for their employees’ salaries, CPF contributions, and any statutory and contractual benefits, which may be pro-rated due to the reduced work arrangements.

Your employees do not actually need to seek your consent for a second job arrangement unless the employment contract prohibits moonlighting or there is a conflict of interest.

If your employee falls ill on the day they were only working for their second employer, you, as the first employer, do not have to provide sick leave and medical benefits for them. Similarly, if your employee suffers a work injury while working for the second employer, only the second employer is responsible for the workplace injury compensation, and not you.

In a complicated situation where the employee works for both employers during a day he falls ill, both employers are required to provide sick leave and medical benefits, which can be pro-rated, assuming he has worked for both employers for more than 3 months.

Do note that foreign employees are not allowed to work as freelancers or take on second jobs freely.

Read Also: Why Singapore’s Largest Employer (The Public Service) Does Not Encourage Moonlighting?

#4 What The Second Employer Needs To Know

As the second employer, you will typically see employees taking on a second job as a short-term worker in your company. Perhaps, if this trend becomes more acceptable, it may apply to longer-term employees at some point.

Even though the Employment Act states that employees who have worked for 3 months or more are entitled to paid outpatient sick leave and hospitalisation leave, second employers are encouraged to provide employees with sick leave entitlements and medical benefits.

Similarly, second employers are responsible for employees’ salaries, CPF contributions, and any statutory and contractual benefits.

Read Also: Medical Benefits That Businesses Have To Legally Provide For Their Employees In Singapore

#5 Who Is Responsible For CPF Contributions To An Employee Working In Two Jobs

Whether you are the first or second employer, you must pay CPF contributions to their employees based on the wages payable to them. This is regardless of whether an employee may be earning more than $6,000 a month, because the Ordinary Wage (OW) ceiling is applicable on a “per employment” basis.

If an employee is earning more than $6,000, he may apply to limit the employee’s share of contributions. Note this will not affect the Employer’s CPF contribution, and that employers will also have to pay the worker his employee’s share of CPF contributions.

Read Also: Complete Guide To Employers’ CPF Contributions In Singapore

A Second Job Can Help Employees Gain Valuable Skills 

Employers who need to reduce their overhead or are unable to continue paying their employees either in the interim, can view their second jobs as a temporary means to support their livelihoods while your company finds its footing.

The last thing that should be on employers’ minds is to insert a clause to prohibit employees from moonlighting just to circumvent this arrangement currently or in the future.

While working in a second job, employees may also gain broader skills and be more able to contribute to your company – providing a win-win situation. One way to view the second job is that it is usually a temporary situation based on immediate needs in the first place, rather than your employees leaving for another company. 

This point was underscored by Member of Parliament (MP) for Bishan and Toa Payoh GRC Chee Hee Kiong, who is also the CEO of Suntec REIT. He elaborated in Parliament that employees should be allowed to take up two jobs, citing that this will help workers develop a broader skillset.

This article was first published on 23 September 2020 and has been updated with the latest information.

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