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You are here: Home / Blogs / Changes in the Employment Act of Singapore from April 1, 2016

Changes in the Employment Act of Singapore from April 1, 2016

changes in the employment act

From April 1, 2016, all employers in Singapore are required to issue itemised pay slips and key employment terms (KETs) to employees covered under the Employment Act (EA). Additionally, a new framework is also in place to treat less severe breaches of the EA. According to the Ministry of Manpower (MOM), these changes are in place to improve employment standards; as well as facilitate the resolution of any employment-related disputes.

This is a win-win for everybody as – while employees will have a better understanding of how their salaries are calculated, their employment terms and benefits; employers, on the other hand, will have to deal with lesser disputes at the workplaces.

Moreover while announcing these changes in August 2015, MOM assured employers of a light-touch and educating approach. Employers also have the option of taping into an assistance package which includes funding, one-to-one assistance for SMEs, software for generating itemised pay slips, and providing blank payslips and KETs templates that can be filled in by hand.

Related Post: Learn more about the amended foreign manpower act.

These changes come after an intensive feedback collection exercise conducted by the Government through several platforms, including public consultations conducted in July to October 2013. Later, proposals were evaluated by employers, unions and the Government, and fine-tuned. The details of the changes are as below:

1) Itemised Pay Slips

changes-in-the-employment-act-itemized-payslipAll employees covered under the Employment Act must issue itemised pay slips, which must be given together with the payment or within three working days of payment. This may be in soft or hard copy (including handwritten). In the case of termination or dismissal, employer must give pay slips together with the outstanding salary. Additionally, employers must keep a record of all pay slips issued.

2) Employment Records

Along with the records of pay slips, employers in Singapore are now required to maintain records for all employees covered by the Employment Act in soft or hard copy (including handwritten). These records – employee records and salary records (same as itemised pay slips) – must be maintained:

  • latest two years for current employees
  • for ex-employees – last two years, to be kept for one year after the employee leaves employment

3) Key Employment Terms (KETs)

changes-in-the-employment-act-key-employment-termsEmployers must issue KETs in writing (soft or hard copy including handwritten) to all employees who enter into a contract of service on or after April 1, 2016, are covered by the Employment Act, and are employed for 14 days or more. Please note that this refers to the length of contract, not the number of days of work. The common KETs to be included (if applicable) are leave policy, medical benefits, working arrangements, salary period, basic salary, fixed allowances, fixed deductions, probation period, notice period etc. Notably, these KETs can also be provided through the employee handbook or company intranet.

Administrative Penalties for Civil Breaches

Some civil breaches that can attract administrative penalties under the amended Employment Act of Singapore are:

  • Itemised Pay Slips – failure to issue, or issuing inaccurate or incomplete
  • Employment Records – not maintaining detailed records
  • Key Employment Terms (KETs) – failure to issue in writing, or issuing inaccurate or incomplete

But MOM assured the employers that it will “will adopt a light-touch enforcement approach and focus on educating employers in the first year”.

Employment Act Assistance Package for Employers

Finally, to help employers cope with the changes in place since April 1, 2016, the MOM has announced an assistance package.

This includes a guidebook published in all the four national languages – English, Tamil, Malay and Mandarin – on how to comply with KETs and itemised pay slips. This is available at MOM Services Centre, National Trades Union Congress, Singapore National Employers Federation, Singapore Business Federation, Association of Small and Medium Enterprises, Tripartite Alliance for Fair and Progressive Employment Practices and SME Centres.

Ongoing seminars and workshops are also being organised by the Singapore National Employers Federation, Singapore Business Federation, Tripartite Alliance for Fair and Progressive Employment Practices, and Ong Teng Cheong Labour Leadership Institute.

Advisory services for SMEs

changes-in-the-employment-act-advisory services-for-smesAdditionally, SMEs can approach the business advisers at any of the SME Centres for one-to-one assistance on the EA, including the guidance on relevant Government assistance schemes.

SMEs are also being encouraged to use tools such as SP-Pay pay slip software developed by students from Singapore Polytechnic’s (SP) Diploma in Business Information Technology.
Moreover, businesses with complex needs can apply for funding to adopt IT solutions for the new Employment Act requirements. One of the most popular schemes in this regard is the Productivity and Innovation Credit (PIC). “Businesses that send their HR officers for Employment Act-related training, or acquire or upgrade their IT systems to issue pay slips, etc., can tap on the PIC scheme,” informs the MOM.

Related read: 4 Employment Act Updates Every Singapore Company Should Know

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