The Employment Act forms Singapore’s main labour law, regulating the relationship between employers and employees.
Who Is Covered Under The Employment Act?
The Employment Act protects full-time, part-time, temporary, and contract employees in Singapore who enter into a contract of service with an employer.
Any term of a contract signed by an employee which is less favourable than the Employment Act will be illegal, null and void, to the extent of the Employment Act.
Employees who are statutory board and civil servants, seafarers, and domestic workers are NOT covered under the Employment Act. These employees are typically covered by other Acts and regulations, as well as their employment contracts. Foreign employees are covered under a different act – the Employment of Foreign Manpower Act (EFMA).
While the Employment Act serves to protect employees, business owners should understand it as well to use as a reference when formulating company policies and to treat their employees.
Here are 10 statutory requirements when it comes to having to pay your employees.
#1 Calculating Employee Salary For Incomplete Month Of Work
There are several reasons why an employee may not have completed an entire month of work, including starting after the first day of the month, terminating employment before the last day of the month or taking no-pay leaves, or other reasons.
When such a situation arises, employers must use this formula when computing the salary owed to the employee.
Source: Employment Act
When doing this calculation, any day the employee is supposed to work 5 hours or less constitutes a half-day.
#2 Itemised Pay Slips
From 1 April 2016, the Employment Act requires all employers to issue an itemised pay slip to employees. The pay slip must be given to your employees (even if they are terminated) within three days of salary payment.
The itemised pay slips can be in soft or hard copy, and can be handwritten as well. Itimised pay slips must include:
- Full name of employer
- Full name of employee
- Date(s) of payment
- Basic salary – which include basic hourly rate, days worked or pieces produced for employees under such terms
- Start and end date of salary period
- Any allowance
- Additional payments in the salary period (e.g. bonus, public holiday pay)
- Deductions in the salary period (e.g. employee’s CPF contributions, no-pay leave)
- Overtime hours worked
- Overtime pay
- Start and end date of overtime period (if different from salary period)
- Net salary paid
Employers must keep a record of all pay slips issued for two years for both existing and ex-employees (to be kept for one year after employee leaves).
#3 Overtime Pay
Overtime pay only applies to employees covered under Part IV of the Employment Act – providing for rest days, hours of work and other conditions of service.
Part IV of the Employment Act only applies to i) workmen (whose work mainly involved manual labour) earning a monthly basic salary of not more than $4,500 AND ii) non-workmen employees covered under the Employment Act, earning a monthly basic salary of not more than $2,600. Part IV of the Employment Act does not cover managers or executives, referring to employees with executive and supervisory functions.
For employees who are covered, employers must pay their employees at least 1.5 times the basic hourly rate. Overtime pay also cannot be substituted for time off.
For employees not covered under Part IV of the Employment Act, the entitlement depends on their employment contract.
#4 CPF Contributions
Employers are required to make CPF contributions for their employees or face late payment charges, fines and even imprisonment of up to 7 years.
Employers have to make CPF contributions for their employees by the end of the month. You have a grace period of 14 days to pay for it. If the 14th day falls on a weekend or public holiday, you can make payment by the next working day.
#5 Paid Annual Leaves
Employees who have worked for more than three months are entitled to a minimum of seven days of paid annual leave year. Employees are also entitled to an additional day of paid annual leave per year for every they work with their employers, up to a maximum of 14 days.
Employees who have not served for an entire year is entitled to a pro-rated number of paid annual leaves.
Employees who absent themselves from work without permission or reasonable excuse for more than 20% of the working days in a month or year will forfeit their entitlement to their paid annual leave.
If an employee is terminated on any grounds other than misconduct, the employer must pay the employee their remaining paid annual leave at their gross salary.
#6 Paid Sick Leaves
Any employees who have worked for more than six months are entitled to paid sick leaves, after certification by a medical practitioner in Singapore.
If no hospitalisation is necessary, the employee may take up to 14 days of paid sick leave each year. If hospitalisation is necessary, up to 60 days a year (including the 14 days of sick leaves without hospitalisation)
|Length Of Service||Sick Leaves (if no hospitalisation required)||Sick Leaves (if hospitalisation is required, and inclusive of the 14 days sick leave without hospitalisation)|
|More than 6 months||14||60|
|More than 3 months but less than 4 months||5||15|
|More than 4 months but less than 5 months||8||30|
|More than 5 months but less than 6 months||11||45|
Perhaps relevant to the COVID-19 situation, the Employment Act states that hospitalisation sick leaves apply to employees who may be quarantined.
#7 Reimbursement Of Consultation Fees For Medical Certificate (MC)
Employers must pay for the medical consultation fees of their employees, who have worked with them for more than 3 months, if they take a sick leave and their medical certificate (MC) is issued by a government or company-approved doctor or dentist.
Employers should clearly communicate the list of company-approved doctors and dentists to their employees.
#8 Working On Public Holidays
Employees are entitled to 11 public holidays at their gross salary each year. An employee may be required to work on public holidays. Agreements can be struck between employers and employees to substitute work on a holiday for any other day or to be paid for it.
If employee’s rest day falls on a public holiday, the next working day should be a paid holiday, or employers can pay their employees for that day of work. If the public holiday falls on a half work day, the employee is still entitled to a full day of salary.
#9 Maternity Leaves
Singaporean and PR female employees are entitled to 16 weeks of Maternity Leave. Your female employees will not be entitled to any pay during the benefit period if she has not served for a period of at least 3 months preceding the day of her confinement.
For business owners, you are required to fork out the first eight weeks of pay, while the government will fork out the last 8 weeks, for the first and second children. The government will fork out the full 16 weeks of pay for the third and subsequent children.
|Births||Paid By Employer||Paid By Government|
|First and second||First 8 weeks||Last 8 weeks|
|Third and subsequent||–||All 16 weeks|
Female employees are required to give at least one week notice before absenting herself from work.
During her maternity, it is against the Employment Act to dismiss the employee. If the female employee works for any other employer after she has absented herself due to Maternity, she forfeits her claim to payment.
Employers who knowingly employ a female employee at any time during the period of 4 weeks immediately following her confinement will be guilty of an offence.
#10 Childcare Leave And Extended Childcare Leave
Employees who have worked for more than three months and has a Singapore Citizen child below age 7 is entitled to 6 days of childcare leave a year (regardless of the number of children). Parents of non-citizen children can take 2 days of childcare leave a year.
Business owners will have to fork out for the first three days of the childcare leave for employees with Singapore Citizen children. The government will pay for the remaining three days. Payments are capped at $500 per day, including CPF contributions.
Employers are not required to pay employees for any childcare leaves not taken in the year or if the employee leaves.
Your employees may be eligible for 2 days of extended childcare leave if their youngest is between 7 and 12 years old and their child is a Singapore Citizen. They must also have worked with you for at least 3 months.
These two days of extended childcare leave is pay for by the government. For employees with children between 7 and 12 years old and under 7 years old, the total paid childcare leave for the year is 6 days.
Building a Sustainable Future
Be part of the Singapore Green Plan 2030 and achieve your business’ sustainability goals. Fund your green initiatives today with the OCBC SME Sustainable Financing Framework.
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.