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News Flash: Changes to Employment Act from 1 April 2014

The Ministry of Manpower (MOM) has made changes to the Employment Act that would take effect 1 April 2014.

The quick overview of amendment on the flash banner on MOM’s website states the following:

  • Better protection for more workers
  • Flexibility for employers
  • Improvement employment benefits and standards
  • Enhance enforcement and compliance

 

What’s Employment Act?

It is Singapore’s main labour law enacted in 1968 to make sure employment standards are reasonable while businesses remain competitive.

 

Key Highlights in The Employment Act Changes 2014

As the Singapore economy grows, the Ministry of Manpower sees to it that the Employment Act stays relevant to the changing employment and business environment. After obtaining feedback that were carefully evaluated by employers, unions and the government, the changes were consolidated and set to take effect on the start of 2nd quarter this year.

In terms of salary adjustments, about 150,000 workers, such as clerical and frontline service staff will receive an increment from a basic monthly salary of $2000 to $2500. About 300,000 Professionals, Managers and Executives (PMEs) will also stand to gain.

To help employers manage costs, overtime payables to employees will be capped. Employers will also be given the extra option to grant time-off in-lieu for PMEs required to work on public holidays subject to mutual agreement. Without an agreement, the employer has to grant at least half a day off in-lieu.

The Ministry of Manpower is enhancing enforcement of and compliance with employment standards by raising the penalty for failing to pay salary in accordance with the Employment Act. First-time offenders face a fine from $3,000 to $15,000 and/or serve 6 months jail term. Subsequent offence would be a fine from $6,000 to $30,000 and/or 12 months jail term.

Individuals such as directors or partners of companies are held accountable for Employment Act offences committed by the company.

Do take note that from 1 April 2014, employment inspectors are authorised to arrest anyone deemed guilty of failure to pay salary and to enter any workplace to conduct checks.

To assist employers, MOM will provide necessary tools from 1 April 2014 on MOM website to implement the Employment Act requirements, which include simple payslip booklets and downloaded payslip/employment record templates.

Read full Amendments to the Employment Act here.

 

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