5 Things to Consider when Employing in Singapore

1.  Employment Act

This act applies to employees, both locals and foreigners. In Singapore, contracts are very important. The relationship between workers and employers is regulated and governed almost exclusively by contracts. The Singapore Employment Act is the primary legislation that overlooks the hiring, onboarding, and offboarding of individuals.

Both employee and employer practice independence to add clauses as they prefer, but the contract, in general, is still subject to specific requirements as statutorily provided by the common law and the Employment Act.

2.  Employment of Foreign Manpower Act

This act is applicable to all foreign workers in Singapore. The employment of foreign workers is regulated by this act. There are also some employment laws in the country that apply to them, regardless of their particular contract’s clauses. This will include childcare leaves, maternity leaves, and work-related injury compensation.

Foreign workers must secure work visas, which can be acquired at Singapore’s Ministry of Manpower, before beginning employment. Such work visas can come as three variations:

●     Employment pass (EP) - the most preferred type of work visa which is applicable for experienced professionals, personnel in the managerial position, and even executives.

●     Work permit - issued to basic-skilled employees from approved territories and countries. The issuance of permits will depend on the specific sector or field that the employee will be working in.

●     S pass - issued to mid-level skilled foreigners, such as technicians.

To be eligible for the EP, you must possess the following criteria:

●     A monthly salary not below S$3600 for young graduates; the criteria is higher for more experienced employees

●     Specialised jobs, or managerial and executive roles

●     Qualifications from respective educational and professional bodies

3.  Singapore Employment Contract

As mentioned earlier, the contract between employer and employee holds much stock in Singapore. The contract should include the following general provisions:

●     Date of commencement and details about probation (when applicable)

●     Details regarding salary - this includes any allowances included, as well as basic pay. There is no statutory minimum wage in Singapore. There is also no statutory bonus payment rates. However, the Employment Act dictates that the salary must be paid at least once in a month, within seven days after the salary period. The common practice is for the company to pay a month’s salary as a form of annual bonus to their employees.

●     Job description and duties

●     Annual leave - the minimum annual leave is set at a 14-day statutory recommendation. It applies to all employees under the Employment Act. This may vary depending on how long the worker has been working. Applying for leaves should be specified in the contract, too, including provisions. The country’s Ministry of Manpower provides an annual public holiday list that is often followed by all employers in Singapore.

●     Working hours - this may include overtime provisions as well. The Employment Act provisions of workers not clocking in over 44 hours a week is applicable to those who earn a salary lower than S$2500 monthly.

●     Confidentiality clauses

●     Termination clauses and notice period - the notice for resignation or termination should be handed in personally in writing

●     Childcare and parental leave provisions - for foreigners, the maternity provisions is set at 8 weeks, and 16 weeks for Singapore residents.

●     Sick leave - the minimum statutory hospitalization and sick leave are applicable to employees under the Employment Act. This may also include sick leave without pay. The Employment Act does not have a statutory requirement for including health insurance for employees.

●     Governing law - all work contracts are governed by Singapore Law.

4.  Central Provident Fund (CPF)

All Singapore employers should follow the applicable mandatory statutory contributions for all employees. This is subject to particular qualifying conditions, such as the CPF and SDL.

Every Singapore employer must comply with the relevant mandatory statutory contributions for each employee, subject to certain qualifying conditions. This includes the CPF and SDL.

The Central Provident Fund (CPF) contributions can be paid for every citizen and permanent resident. The employer has to pay the employee’s and employer’s share for the monthly contributions. These are determined through applicable CPF rates, as well as the employee’s salary. The employer can deduct the worker’s share from the salary.

5.  Skills Development Levy (SDL)

The SDL is set in place to fund the Skill Development Fund. This fund is a support for all workers’ training grants, upgrading programs, and other similar activities. Contributions for SDL are required for all employees, both local and foreign. Temporary and part-time employees are also included. The employer has to pay the contributions, which cannot be deducted from the workers’ salary.

This fund has a rate of S$2, or 0.25% of the employee’s gross monthly pay up to the first S$4500, whichever is higher. Once the remuneration of the employee is over $4500, they get a fixed SDL rate of $11.25.