Updates to Employment Act 2019

Both Singapore and foreign employees are covered by the Employment Act. The employment law originally came into force in 1968 to protect workers’ rights and has since undergone several updates such as making wage slips a mandatory requirement and ensuring workers know their key employment terms within 14 days of employment. Employees also enjoy benefits such as paid sick leave, mandatory annual leave of seven to 14 days and protection against unfair dismissal. 

Here’s how the Employment Act updates in 2019 may affect you:

1. Senior managers and executives will now be covered

Currently, the Act only applies to non-managerial and non-executive employees regardless of salary (rank-and-file). From April 2019 the salary cap of $4,500 per month will be removed. All staff under employment, regardless of salary or rank, will be covered by the Employment Act 2019.

Benefits extended to all employees include:

• Annual leave, paid sick leave/hospitalisation leave
• Paid public holidays
• Timely payment of salary
• Maternity protection
• Childcare leave
• Right to preserve existing terms and conditions in employment transfers resulting from the sale of business and business restructuring
• Statutory protection against dismissal “without just cause or excuse”

2. Expanded unfair dismissal protection

All employees will now have recourse to the Employment Claims Tribunal, in the event that their employment has been terminated without just cause.

Wrongful dismissal and salary-related claims will be heard at the Tripartite Alliance for Dispute Management and the Employment Claims Tribunals under Singapore’s Ministry of Manpower.

3. More non-workmen will be protected with maximum working hours and overtime pay

Part IV of the Employment Act covers maximum working hours, mandatory rest days and statutory overtime pay.

Currently, Part IV applies only to employees who are non-managerial and non-executive

• Workmen earning up to S$4,500 per month
• Non-workmen earning up to S$2,500 per month

Under the amended Act, non-workmen (rank-and-file or white-collar workers) will have their salary cap amended from S$2,500 to S$2,600 per month, so they would be covered under the new Act. This raised salary cap will also affect increase overtime pay obligations for non-workmen. Currently, the hourly basic rate of pay for non-workmen earning S$2,250 or more per month is based on a flat monthly salary of S$2,250 per month. From 1 April, this base will be increased to S$2,600.

Workmen (manual or blue-collar workers) earning up to $4,500 a month will continue to be covered.

4. Authorised deductions from an employee’s salary

Currently, no deductions can be made from an employee’s salary other than those prescribed in the Employment Act. From 1 April 2019, deductions can be made from an employee’s salary with the employee’s written consent. The employer must allow employees to withdraw such consent at any time without penalty. This provides flexibility to the employers to cater for deductions that are not specified in the Employment Act and safeguards employees’ salaries since consent is required. 

What now?

With changes coming into effect April 2019, now is the time to seek a review of your HR/employment policies. Hawksford is able assist with a full spectrum of HR services and matters including recruitment, payroll, benefits and employee exits.  We are also able to facilitate and recommend options for independent legal advice where required.

This article is produced by Hawksford Singapore Pte Ltd and does not constitute legal advice. It is intended to provide general information only.