This page provides an overview of the statutory requirements under the Singapore Employment Act. You will learn about employment contracts, wages, benefits, work hours, annual leaves, Central Provident Fund contributions, and other key concepts.
Singapore, being the regional hub and an open economy, its human resource is eclectic in nature. The government has a well thought out and structured legislation in place in the form of Employment Act, the main labor law of the country, clearly spelling out the basic terms and conditions of employment, and the rights and responsibilities of employers and employees under a contract of service. Singapore government also ensures that the Act while in line with the international legislations also provides adequate protection to all vested parties in the process of employment. Developing a proactive and harmonious labor, industrial and government relationship has remained the top priority of the legislation.
The relationship between employer and employee is determined largely by the contract of employment between them. Generally under Singapore Law, parties are free to contract as they choose and any matters arising between them would have to be resolved by looking at either the express and/or implied terms of the contract in question. But legislations are in place to regulate the terms of contract to prevent unreasonable restrains and limitations on the parties involved. Common law and specific statutes govern the terms of contracts of employment.
The principal statutes regulating employment in Singapore are contained in Employment Act and other pertinent statutes shaping employment practices include the Workplace Safety and Health Act (“WSHA”), which came into effect on March 1, 2006; the Children Development Co-Savings Act (Cap 38A) (“CDCSA”); the Retirement Age Act (Cap 274A) (“RA”); the Trade Unions Act (Cap 333) and the Industrial Relations Act (Cap 136) (“IRA”).
The Employment Act (Cap 91) (“EA”), was first passed in 1968 and was last amended on January 1, 2009. In May 2012 Ministry of Manpower announced a major review of the Act following the massive change in employment landscape that is fast departing from the conventional practices in terms of time, payment, mode of work, type of people etc.
What is the Singapore Employment Act?
The Singapore Employment Act is a statute that details the rights as well as duties of an employee under a Contract of Service with a Singapore employer.
The Singapore Employment Act covers all employees except for the following:
- Managerial and executive personnel
- Domestic Workers
- Any person employed by a Statutory Board or the Government.
Part IV of the Employment Act, which provides for rest days, hours of work and other conditions of service, applies only to:
a) Workmen earning not more than $4,500 basic monthly salaries and
b) Employees earning not more than $2,000 basic monthly salaries.
Junior managers and executives earning $4,500 basic monthly salary and below are covered only partially on the basic payment of salary. All other provisions of the Employment Act do not apply to them.
What is a Contract of Service?
A Contract of Service is not a Contract for Services.
A Contract for Services is an agreement between an independent contractor and a client (company). No employer-employee relationship is established in this case.
A Contract of Service (Employment Contract) is a verbal or written agreement expressing:
- one person’s agreement to employ another as a staff and
- the agreement of the other person to serve as a staff to the employer.
Therefore, an apprenticeship or internship contract is also considered a Contract of Service.
The salient features of an Employment Contract are:
- Designation title and job scope
- Employee’s commencement date and employment period
- Hours of work
- Probation clause
- Remuneration package
- Employee benefits
- Code of conduct
Designation title and job scope
The Employment Contract must clearly state the designation of the employee. It must also clearly define the job scope to be fulfilled by the employee.
Employee’s commencement date and employment period
The Employment Act does not apply if a new recruit does not turn up for work after signing the Employment Contract. This is because the employer-employee relationship has not begun.
Hours of Work and Overtime
An Employment Contract must clearly state
- the daily working hours,
- number of working days in a week as well as
- number of rest days in a week.
An employee covered by Part IV of the Employment Act is not required under his/her contract of service to work more than eight hours in a day or 44 hours in a week.
Employers that require their staff to work over 12 hours per day are required to apply for overtime exemption from the Ministry of Manpower, according to Section 40 of the Employment Act.
The Employment Act of Singapore does not have any clauses that specifies the probation period for employees.
However, the standard practice in Singapore is to have a probation (assessment) period ranging between 3 – 6 months, to gauge the performance of the new employee.
Singapore does not implement a minimum wage.
Failure to pay an employee’s salary in accordance with provisions of the Employment Act is considered an offence. Employees who are not paid for work done can report employers to MOM for investigation. Salary earned by an employee under a contract of service, other than additional payments for overtime work, shall be paid before the expiry of the 7th day after the last day of the salary period in respect of which the salary is payable. Additional payments for overtime work shall be paid not later than 14 days after the last day of the salary period during which the overtime work was performed.
In Singapore, employee benefits include annual leave, medical leave and healthcare benefits, retirement fund contributions, staff incentives and bonuses as well as related family (maternity and childcare) benefits.
Employees must have served at least 3 months with their employer to be entitled to annual leave stipulated in the employment contract. According to the Ministry of Manpower, an employee is entitled to at least 7 days of annual leave in the first year of service. However, the standard practice in Singapore is 14 – 25 days of annual leave per annum and it varies from company to company.
Medical leave and health care benefits
A worker covered by the Employment Act is entitled to paid medical leave if he has fulfilled the following:
- He has served the employer for at least three months
- He has informed the employer of his absence within 48 hours
- His medical leave is proven by a doctor, general practitioner or dentist via the medical certificate, commonly known as MC in Singapore.
The number of medical and hospitalization leave an employee is entitled to depends on the duration of his service. Employees who have worked for three months are entitled to 5 days of medical leave and 15 days of hospitalization leave. The maximum number of medical and hospitalization leave an employee is entitled to is 14 days and 60 days respectively.
In Singapore, and under the Child Development Co-Savings Act, a female employee is entitled to 16 weeks of paid maternity leave if:
- The child’s parents are lawfully married;
- The child is a Singapore Citizen;
- The employee has served her employer for at least 90 days before the child’s birth or
- the mother of the child has been continuously self-employed for at least 90 days before the child’s birth and has not lost her source of income during her maternity period.
In the case where the mother is single, the child is not Singaporean or the parents are foreigners working in Singapore, whether full time or on a contractual basis, women covered by the Employment Act are still entitled to 12 weeks of maternity leave.
Childcare and infant care leave
Under the Child Development Co-Savings Act, an employee is entitled to 6 days of infant care leave and 6 days of childcare leave per annum (regardless of the number of children) if he or she fulfils all of the following conditions:
- The employee has worked for the employer for at least three months;
- For infant care leave: The child is under 2 years old;
- For childcare leave: The child is no older than 7 years old on or after 31 October 2008;
- The child is a Singapore Citizen; and
- The child’s parents are/were lawfully married
If the parent is self-employed, he/she must be engaged in business for at least three months and must not have lost his/her source of income during the childcare or infant care period.
The first three days of childcare leave will be covered by the employer and the last three days will be borne by the Government (capped at $500 per day, including CPF).
Retirement fund contributions
The Employment Act does not require an employer to pay retirement benefits to an employee, unless it is stated in the employment contract.
However, an employer in Singapore is under the obligation to make CPF (Central Provident Fund) contributions (both the employers’ and employees’ share) for Singaporean and Singapore Permanent Resident staff (including temporary, part-time) within 14 days from the end of a month and at the rates set out by the CPF Act.
The following people are exempt from CPF contributions:
- Foreign workers on the S Pass, Singapore Employment Pass and temporary work permits;
- Overseas Singaporeans; and
- Sole-proprietors and self-employed professionals.
Staff incentives and bonuses
Many Singapore companies offer staff incentives in terms of monetary bonuses and variable payouts to motivate employees to give their best. In Singapore, an Employment Contract typically lays out the incentives and bonuses an employee is entitled to.
There are three types of staff incentives in Singapore namely, the AWS, the bonus and variable payment.
The AWS stands for Annual Wage Supplement. It is commonly known as the 13th month bonus or payment.
The bonus is the payment by the company to reward the employee for his services. It is typically an annual reward that is paid out at the end of the year.
The variable payment is similar to a bonus, in the sense that it is meant to reward the employee for his contributions or increased productivity.
Employers are under contractual obligation to pay any of these incentives if they are stated clearly in the contract.
Code of conduct
An employee may not change the terms and conditions of an Employment Contract without the employee’s agreement to those changes. If either party does not agree to the changes, both parties must try to negotiate for more acceptable terms.
- The employer and employee can both terminate an Employment Contract. Either party must give each other a written notice of the termination of the contract according to the notice period.
- If either the employer or employee wishes to terminate prior to the requisite notice period, either must pay the other a sum equal to the salary earned during the notice period.
- The employer and employee may terminate the employment contract if either of them breach the terms of the contract or misconduct.
- The employer cannot reject an employee’s resignation. Failure to allow an employee to leave his service is an offence punishable by either a fine not exceeding S$5,000 or imprisonment of up to 6 months, or both.
Other important factors:
All employees covered by the Employment Act are entitled to 11 paid public holidays in a year.
The 11 gazetted public holidays are:
- New Year’s Day
- Chinese New Year (two days)
- Hari Raya Puasa
- Hari Raya Haji
- Good Friday
- Labour Day
- Vesak Day
- National Day
- Christmas Day
The legal age to work in Singapore is 13 years old and above. Children aged 13 – 14 years are only eligible to conduct light or casual work. A child of this age cannot work in industrial sectors unless he/she is under the personal charge of a parent. Youth aged 15 and above may engage in industrial work upon fulfilling medical requirements and notifying the Commissioner for Labor.
The minimum retirement age in Singapore is 62 years.
Hiring Foreign Employees
Under the Singapore Employment Act, a foreigner must have valid Singapore work visa to be able to work in Singapore. If you wish to hire a foreign professional, you will have to apply for a valid Singapore work permit or work pass called the Singapore Employment Pass on his/her behalf before he/she can commence employment with you.
The foreign workforce in Singapore is classified into three main groups:
- Skilled professionals
- Semi-skilled professionals
- Unskilled professionals