For some of us, 1 May is seen as just an extra holiday, or if we are lucky a long weekend. There are no relatives we need to visit, festive occasions to celebrate with friends or even anywhere we can go to catch fireworks.
For those who are unaware, we wrote about the history of Labour Day and how it came about. Labour Day has its roots in the fight for workers’ rights in the late 1800s in the US with its origins tainted with violence and blood.
Read Also: Why We Celebrate Labour Day On 1 May
If there is one thing we should talk about during Labour Day, it’s workers’ rights.
Like many other policies and topics, Workers’ right isn’t a static concept. What may seem reasonable in the past – for example, Singapore used to have a 5.5-day workweek but this was changed in the early 2000s – may no longer be supported or accepted today.
As society and the needs of a country evolved, the workplace has to keep up with the times. In this article, we highlight some of the notable changes in workers’ rights over the past decade.
Introduction Of The Progressive Wage Model For Low Wage Workers
First introduced in 2012, the Progressive Wage Model (PWM) states that a minimum wage should be paid to workers in specific industries. This minimum amount also increases as workers progress in their careers, whether that’s through work experience or by upgrading themselves by attending accredited courses.
Today, PWM covers 7 sectors/occupational PWs. There are the cleaning sector, security sector, landscape sector, life and escalator sector, retail sector, food services sector and occupational PWs for administrators and drivers.
Take for example the cleaning sector. Today the PWM states that a general cleaner needs to be paid a basic monthly salary of at least $1,312. By 30 June 2029, the salary of general cleaners will need to be at least $2,420, an increase of about 84% in basic monthly salary. And if they attain the position of supervisor, the minimum basic monthly salary will need to be at least $3,210 by 2029.
Raising The Retirement & Re-Employment Age For Singapore Workers
During the 2019 National Day Rally, it was announced that the statutory retirement age will be raised from 62 to 65 while the re-employment age will be increased from 67 to 70. This increase will take place gradually, starting in 2022.
As I wrote back in 2019, the increase in the retirement age makes perfect sense. This is because it aligns the retirement age with when CPF LIFE payouts commence. From a retirement planning standpoint, having the retirement age to be different from the CPF LIFE payout age was always odd.
Moreover, with the increase in life expectancy and also an increase in health-adjusted life expectancy, it makes sense to allow workers who want to continue working to do so.
It’s important to stress that the increase in the retirement and re-employment age in Singapore is a worker’s right, rather than a worker’s obligation. Both the retirement age and the re-employment age are meant to protect the interest of workers, not their company. Workers can always choose to retire earlier if they want to.
Higher CPF Contributions For Older Singapore Workers
60 is going to be the new 55. This is true at least when it comes to the CPF contributions of older Singapore workers.
Also announced during the 2019 National Day Rally, the CPF contribution rates for older workers will increase, starting in 2022. By about 2030, the full planned increase should be fully implemented.
|Age bands||Previously||As Of 1 Jan 2022||By about 2030|
|55 and below||37%||37%||37%|
|Above 55 to 60||26%||28%||37%|
|Above 60 to 65||16.5%||18.5%||26%|
|Above 65 to 70||12.5%||14.5%||16.5%|
From the table above, we can see that the planned increase in CPF contributions for older workers will mean that a future 60-year-old worker will get the same CPF contributions as a 55-year-old worker today. This also applies to future workers between the age of 60 to 70, as they will get the same CPF contributions as someone that is 5 years younger than previously in the workforce.
Platform Workers Will Also Receive CPF Contributions Starting From 2024
Workers who sign a contract of service are seen as having an employer and employee relationship. However, those who have a contract for service are not seen as employees. Thus, they do not get the usual benefits such as CPF contributions.
In 2022, the Singapore government accepted all 12 recommendations by the Advisory Committee on Platform Workers to strengthen their protections. One of the key protection pillars is requiring Platform Companies to start making mandatory CPF contributions in the latter part of 2024. Beyond the compulsory contributions to their CPF MediSave Account (MA) currently, they will also start contributing to their Ordinary Account and Special Account.
In short, while Platform Workers will still not be classified as employees, they too, will get to enjoy being part of the CPF contribution framework. This will improve their housing and retirement adequacy, without compromising the flexibility of their work.
Workers’ Right Will Continue To Evolve In The Future
Just because something was okay in the past doesn’t mean it’s okay in the future.
As society evolves, it’s always worth looking out for how we can continue to adopt policies that can not only help increase the wages for workers but also provide them with better welfare and job prospects.
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