When hiring in Singapore, employers must issue Key Employment Terms (KETs) in writing to all employees who are 1) covered under the Employment Act and 2) employed for 14 days or more.
This set of Key Employment Terms have to be given to employees within 14 days after the start of their employment, and must include their terms of employment.
What Should Be Included In Key Employment Terms (KETs) Given To Employees?
While employers will typically have contracts for employees stipulating terms and conditions for their employment, they should also include these 17 Key Employment Terms (KETs) as set out by the Ministry of Manpower (MOM), unless they don’t apply.
For example, as overtime pay does not apply to PMEs, the Key Employment Terms (KETs) in item 11 (Overtime Period) and 12 (Overtime Pay) do not need to be included.
|No.||Key Employment Terms (KETs)|
|1||Full name of employer|
|2||Full name of employee|
|3||Job title, main duties and responsibilities|
|4||Start date of employment|
|5||Duration of employment (if employee is on a fixed-term contract)|
|6||Working arrangements, such as:|
– Daily working hours (e.g. 8.30am to 6pm)
– Number of working days per week (e.g. six)
– Rest day (e.g. Saturday)
– For hourly, daily pr piece-rated workers, employees should indicate the basic rate of pay (e.g. $X per hour, per or per piece)
|11||Overtime payment period (if different from salary period in item 7)|
|12||Overtime rate of pay|
|13||Other salary-related components, such as:|
|14||Types of leave: such as:|
– Annual leave
– Outpatient sick leave
– Hospitalisation leave
– Maternity leave
– Childcare leave
|15||Other medical benefits, such as:|
– Medical benefits
– Dental benefits
|18||(Optional) Place of work|
– Used if the work location is different from the employer’s address.
– Although optional, you are strongly encouraged to include this information.
Source: Ministry of Manpower (MOM)
For employers who aren’t sure or prefer to follow a template, MOM has provided a sample form so that none of the fields will be left out.
Just including the relevant Key Employment Terms (KETs) in your contract is not sufficient on its own. While businesses may want to protect their interest, their Key Employment Terms for employees also cannot be less favourable than the minimum requirements as set out by the Employment Act.
Minimum Requirements In The Employment Act For Key Employment Terms (KETs)
Some of the Key Employment Terms are very standard, such as full name of employer, full name of employee and having to list and employee’s job title, main duties and responsibilities.
Others, while also looking straightforward, may be governed by the Employment Act, and may have minimum statutory requirements. This means what businesses list down on the employment contract may or may not be binding depending on whether they are in line with the minimum requirements.
#1 Working Arrangements
Employers need to list the daily working hours of their employees, the number of working days per week and the rest days that the employee will have. For employees covered under Part IV of the Employment Act, their work hours are regulated.
These employees comprise:
- Workmen (doing manual labour) earning a basic monthly salary of not more than $4,500
- Employees who are not workmen, but who are covered by the Employment Act and earns a monthly basic salary of not more than $2,600
For such employees, contractual work arrangements are:
|If Employees Work||Contractual Hours Allowed|
|5 days or less a week||Up to 9 hours per day or 44 hours a week|
|More than 5 days a week||Up to 8 hours per day or 44 hours a week|
There is some flexibility in allowing employees to work more than 44 hours a week. For example, the employee can work 48 in week 1, 40 hours in week 2 and 44 hours in week 3. So long as hours worked adds up to an average of 44 hours in a continuous 3-week period, it is acceptable.
Employees covered under Part IV of the Employment Act are also not allowed to work more than 12 a day or 72 hours of overtime in a month. Employers must apply to MOM for an overtime exemption for employees to work beyond the overtime cap.
While this protects employees, the reality is that more than 90% of employees are not protected by Part IV of the Employment Act. MOM goes on to encourage employers not the require more than 60 hours of work per week for employee’s well-being and safety.
#2 Salary Period
According to the Employment Act, no salary period can exceed one month. Even if employers fail to list the salary period, it cannot exceed one month, and in fact, it will be taken to mean a salary period of one month.
#3 Fixed Deductions
According to the Employment Act, employers cannot simply make deductions to an employee’s salary as they deem necessary. In the Employment Act, there is a list of allowable salary deductions for:
- Absence from work.
- Damage or loss of money or goods. Before deducting, employers need to 1) hold an inquiry, 2) only deduct an employee’s salary after explaining the cause of damage or loss and 3) not deduct more than 25% of employee’s salary. Deductions must be a one-time lump sum payment which means that only up to 25% of an employee’s salary is recoverable for the damage or loss.
- Supplying accommodation after receiving employee’s consent.
- Supplying amenities and services (authorised by the Commissioner for Labour) and after receiving employee’s consent. Any such deductions cannot exceed the value of the accommodation, amenities or services. It also cannot exceed 25% of the employee’s salary for the period.
- Recovering advances, loans, overpaid salary or unearned employment benefits.
|For advances||– Deductions can be made in instalments spread over not more than 12 months.|
– Each deduction cannot exceed 25% of the employee’s salary.
|For loans||– Deductions can be made in instalments.|
– Each deduction should not exceed 25% of the employee’s salary.
|For overpaid salary and unearned benefits||– Deductions can recover the full amount.|
- CPF contributions
- Payments to registered co-operatives with written consent
- Other purposes for which employees give written consent. Employers cannot make deductions for things that do not benefit employees.
- Payment to co-operative societies for subscriptions, entrance fees, loan instalments, interest or other dues
However, when an employee’s contract of service is terminated, the total authorised deduction may exceed 50% of an employee’s final salary payment.
#4 Overtime Payment Period
For employers covered by Part IV of the Employment Act, overtime work requires employers to pay at least 1.5x the hourly basic rate of pay. Payment must be made within 14 days after the last day of the salary period.
#5 Overtime Rate Of Payment
Work done outside of the contractual hours is considered overtime hours. The overtime rate payable for non-workmen is capped at the salary level of $2,600 or an hourly rate of $13.60.
#6 Types Of Leave (for employees who have worked more than 3 months)
The minimum annual leave for employees is between 7 days. For every year that the employee stays, he or she must receive an additional paid annual leave up to a maximum of 14 days.
Employees must get 14 days of paid outpatient sick leave a year, and up to 60 days of paid hospitalisation leave a year.
Female employees are also entitled to 16 weeks of paid Maternity Leave for their Singaporean children.
Male and female parents get 6 days of childcare leave a year, regardless of number of children, for children below 7. For children between 7 and 12 years old, the childcare leave is 2 days.
#7 Other Medical Benefits
For employees who have worked for more than 3 months, employers need to pay for their medical consultation fees if they are granted a medical leave at any government or company-approved doctors, dentists and specialists.
#8 Probation Period
While there’s no minimum probation period mandated in the Employment Act, employers need to know that they have to offer their employees certain entitlements after the 3-month mark. This includes maternity leave, annual leave, outpatient and hospitalisation leave and others.
#9 Notice Period
There is no maximum notice period, however the Employment Act does state that the notice period must be the same for both employees and employers.
There is also a minimum notice period detailed in the Employment Act.
|Employment Term||Minimum Notice Period|
|Less than 26 weeks||1-day notice|
|More than 26 weeks, but less than 2 years||1-week notice|
|More than 2 years, but less than 5 years||2-weeks notice|
|More than 5 years||4 -weeks notice|
These Are The Minimum Requirements, And Employers Can Go Beyond
As mentioned, these are the minimum standards required by the Employment Act in Singapore. Employers can do more, and often, employees do more. For instance, many employers offer more than 7 days of annual leaves, and employers also tend to provide more generous medical benefits and overtime pay than required.
In certain instances, employers need to understand that there is a standard in place, and they cannot exceed it. This includes an employee’s notice period as well as making deductions from an employee’s salary.
While 90% of employees today are not covered by Part IV of the Employment Act, it doesn’t mean that they aren’t protected. First, their Key Employment Terms (KETs) have to be detailed in their employment contract. This gives them visibility into whether they want to accept it. This means they will only accept a reasonable contract and employers have to abide by their own employment contracts in requiring number of working hours from their employees.
While this means that over 90% of employees not covered under Part IV of the Employment Act and thus not protected in some instances, employers are still required to list down in their Key Employment Term (KETs). This means employees will only sign accept a reasonable contract and employers have to abide by their own employment contracts.
Join The DollarsAndSense Business Community
For more content that helps entrepreneurs, freelancers, and self-employed individuals and learn to build better businesses, join the DollarsAndSense Business Community on Facebook.