Know your employment rights

Updated: 19 Oct 2016
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Note

  • Amendments to the Employment Act: From 1 April 2016, all employers will be required to issue itemised payslips and key employment terms (KETs) to employees covered under the Employment Act. There will also be a new framework to treat less severe breaches of the Employment Act.

The Employment Act seeks to ensure reasonable employment standards while balancing businesses' need to stay competitive. Because the development of an effective workforce requires the cooperation of both employees and employers, it is important that both parties understand and observe those employment standards, and their respective rights and obligations under the law.

Coverage

The Employment Act covers every employee - regardless of nationality - who is under a contract of service with an employer, except:

  • Managers & executives (employees with executive or supervisory functions, including professionals such as lawyers, accountants & doctors)*
  • Seamen
  • Domestic workers
  • Statutory board & government employees

* Managers and executives who earn basic monthly salaries of $4,500 and less are covered only for certain salary provisions under the Act.

Note

  • Part IV of the Employment Act - which provides for rest days, hours of work and other conditions of service - applies only to workmen (e.g., construction workers, drivers and cleaners) and employees with basic monthly salaries not exceeding $4,500 and $2,500 respectively.

Read more about whom the Employment Act covers.

Hours of work, overtime & rest days

Contractual hours of work

Employees are not required to work more than 8 hours in a day or 44 hours in a week (not inclusive of breaks).

Overtime

Any work done in excess of the above stipulated hours is considered overtime work. Overtime allowance is payable at 1.5 times the hourly basic rate of pay. Employees should not exceed 12 hours of work a day (including overtime) or 72 hours of overtime a month.

Break time & rest days

Employees are not required to work more than 6 consecutive hours without a break, which should be at least 45 minutes. They are also entitled to 1 rest day every week.

The above applies only to workmen and employees with basic monthly salaries not exceeding $4,500 and $2,500 respectively. Read more about hours of work, overtime and rest days.

Salary

Frequency of salary payment

Employees must be paid their salary at least once a month, within 7 days after the end of the salary period. This applies to all employees covered under the Employment Act, inclusive of managers and executives who earn basic monthly salaries of $4,500 and less. Employees covered by Part IV of the Employment Act must be paid overtime pay, if any, within 14 days after the salary period.

Salary deduction

Employers can deduct salary for the following situations:

  • For absence from work
  • For damage to or loss of goods or money entrusted to the employee, after conducting an inquiry
  • For cost of meals, if requested by employee
  • For accommodation, amenities or services
  • For the recovery of advances, loans or salary overpayments
  • For income tax payments
  • For contributions to CPF & other schemes approved by the Commissioner for Labour
  • For payments to registered co-operative societies

This is applicable to all employees covered under the Employment Act, inclusive of managers and executives who earn basic monthly salaries of $4,500 and less. Read more about salary matters.

CPF contributions

Under the Central Provident Fund (CPF) Act, CPF is payable for all Singapore citizen and permanent resident employees earning more than $50 a month. It is payable by both employer and employee, as long as the employee earns more than $500 a month.

All CPF contributions must be made by employers no later than 14 days at the end of each salary month, in accordance to the respective employer-employee CPF contribution rates stipulated in the CPF Act.

Rates are determined by 3 factors:

  1. Whether the employee is a Singapore citizen or permanent resident
  2. Age group
  3. Wage band

Here's an overview of what is and isn't CPF payable:

CPF payable CPF non-payable
Basic wages Reimbursements for official expenses
Overtime pay Gifts in kind (e.g. shopping vouchers)
Cash incentives (e.g. Good Service Awards) Termination benefits (e.g. retirement gratuity)
Allowances (e.g. meal, laundry, transport)
Commissions (e.g. sales commissions)
Bonuses

Learn more about CPF contributions for employers and employees.

Termination of contract

Both parties can terminate an employment contract whether written or verbal.

Termination of contract with notice

This is when either party serves the appropriate notice in writing to the other party. The notice period will be based on what has been mutually agreed, either in written contract or verbally. If no such agreement exists, the notice stipulated under the Employment Act shall take effect. During the notice period:

  • Employees can choose to go on approved paid annual leave, but cannot be forced to do so.
  • Unconsumed annual leave can be encashed.
  • Employees can use their annual leave to offset the notice period and bring forward their last day of work. In this case, they will be paid only till the last day of work and can start employment elsewhere immediately.
  • Employees can take sick leave, which should be treated as part of the notice period.
  • Employees cannot use reservist training to offset the notice period.

Termination of contract without notice

This is when either party terminates a contract without serving the notice period. The party who breaks the contract will have to pay a salary in lieu of notice to the other party.

However, employees may terminate without notice if:

  • They are not paid a salary within 7 days after the end of their salary period.
  • They are asked to do work outside the terms of their contract.

While employers may terminate without notice if:

  • The employee is absent from work for more than 2 continuous working days without approval or reasonable cause.

Retrenchment

Employers must serve a notice of retrenchment in writing to employees within a reasonable time frame. The notice period will be guided by what has been mutually agreed; if no such agreement exists, the notice stipulated under the Employment Act shall take effect.

Under the Employment Act:

  • Employees that are retrenched are due all salaries (including unconsumed annual leave & notice pay) on their last day of work.
  • Employees who have worked at the company for more than 3 years can request for retrenchment benefits, the amount of which is subject to negotiation between both parties.
  • Starting 1 Apr 2015, employees who have worked at a company for more than 2 years can request for retrenchment benefits.

Tip

Retrenched employees who need help looking for jobs can visit the Singapore Workforce Development Agency's (WDA) Career Centres.


Warning

Non-compliance of the Employment Act or CPF Act is an offence and can result in heavy penalties. Should you wish to report non-compliance or need help, call the WorkRight helpline at 1800 221 9922 or email workright@mom.gov.sg. All information is kept confidential.

Video: WorkRight Campaign

Employers who want to find out more about how they can ensure that their employees get the rights they deserve can get a WorkRight Toolkit at www.mom.gov.sg/workright.

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