Employment Laws in Singapore

Singapore's Employment Regulations

Singapore's employment laws are mainly covered under the Employment Act, labor laws and the Employment of Foreign Manpower Act. These legislations provide guidelines for hiring employees in Singapore, ensuring fairness and equity in the employer and employee relationship.

Employment Contract in Singapore

The Employment contract is an agreement between the employee and employer that establishes the employment terms in clear detail. It includes terms such as the probation period and conditions related to retrenchment benefits. In Singapore, employment contracts are typically written and legally binding agreements. However, positions such as CXOs or senior management roles may be excluded from having written employment contracts, even though this is not advisable.

Also, the terms of an employment contract provided by the employer must have similar or better conditions than what is permissible in Singapore's Employment Act. In certain situations, these can also encompass elements like the employee's basic monthly salary, salary period, and terms concerning paid sick leave, for which a medical certificate might be required.

In addition, the Ministry of Manpower has statutory guidelines all employers of labor must include in the employment contract. This includes compulsory items such as job role and responsibilities, commencement date, working hours, and rest days, commonly referred to as key employment terms. These conditions extend to shift workers, domestic workers, and civil servants, amongst others.

While the law allows flexibility in the terms and conditions to cater to specific job requirements, any conditions that are less favorable than what is stipulated in the Employment Act are illegal and may lead to affected employees seeking redress under the employment law through dispute management or filing wrongful dismissal claims.

Key elements of an employment contract typically include:

• Job Position and Responsibilities: A clear outline of the employee’s job title, description of the job role, and duties to be performed.
• Compensation package: The employment contract states the details about the employee's salary packages and other forms of compensation such as bonuses, salary, employee benefits and other forms of payment for service rendered.
• Working Hours and Rest Days: Singapore's Employment Act has explicit provisions regarding working hours and rest days. Any deviation from these needs to be justifiably compensated.
• Termination Clause: The employment contract, which dictates the employment relationship, must include details about the conditions for termination. The employment conditions include notice periods, grounds for immediate dismissal, and the protocol to be followed in the event of misclassification of independent contractors.
• Confidentiality and Data Protection Agreement: In the age of remote work and distributed teams, data protection and confidentiality have become increasingly significant. A clause that details the handling of confidential information and data privacy is essential to protect both the employer and employee. It is particularly important for tech talents and companies hiring remotely to be well-versed with the legal and tax risks of remote employees working from abroad.

Employment law and contracts are not just legally binding documents but also instruments that set the tone of the employer-employee relationship. Hence, a good understanding of the contract and adherence to its terms by both parties is vital in fostering a healthy and productive work environment. If you are an employer incorporating a company in Singapore, or a tech talent seeking to work in the thriving Singaporean market, familiarizing yourself with the essentials of an employment contract is a good starting point.

Key Regulations Under the Employment Act

The Singapore Employment Act serves as a foundation for the workplace, outlining the rights and responsibilities of both employers and employees. It establishes a robust framework that ensures fairness and promotes a conducive working environment. Here are several significant regulations under the Act:

• Work Hours: Singapore's Ministry of Manpower has strict regulations regarding the hours of work in Singapore. According to Employment Act, work hours and overtime regulation only applies to employees earning below SGD 2600 per month. These employees earning this figure and below have an obligation to work for 44 hours every week or not more than eight hours daily.
• Overtime Pay: Singapore's Employment Act postulates that employees must observe breaks after every six hours of work. Also, if an employee works for hours more than the stipulated hours of work, they are entitled to overtime pay which is fixed at 1.5 times the hourly basic rate of pay. In addition, the maximum hours of overtime is 72 hours per month.
• Minimum Wage and Salary: There is no existing minimum wage in Singapore. Therefore, employee salaries in Singapore are subject to negotiations between the employer and the employee. However, salaries must be paid at least once a month and must be within seven days after the end of a salary period.
• Public Holidays: Singapore recognizes 11 paid public holidays. If a public holiday falls on a rest day, the following day shall be a paid holiday. Employers who require their employees to work on a public holiday are required to pay an extra day’s salary or grant a day off in lieu.

Leave Rights in Singapore

The Singapore Employment Act provides a comprehensive framework that covers the diverse types of leave available to employees, which offers them the necessary work-life balance. As tech talents, understanding these leave rights is crucial in managing workload and maintaining optimum productivity. For employers building remote or distributed teams, these leave regulations are fundamental in fostering a supportive work culture and promoting employee well-being.

Annual Leave

According to the Employment Act, an employee is entitled to paid annual leave after working in an organization beyond the probationary period or at least three months. However, the duration of the annual leave depends on the years of service in an organization. For instance, if an employee has worked in an organization for more than two years, they are entitled to eight days of paid annual leave. If they have five years of service in an organization, the duration of the annual leave becomes 11 days with pay. For eight years and above, the employees are entitled to 14 days of paid annual leave. Companies with more generous leave policies provide additional days of annual leave, making Singapore an attractive destination for global tech talents.

Sick Leave

Just like the annual leave, the duration of the paid sick leave is dependent on the employee's years of service for the organization. Also, they must have worked beyond the probationary period or at least three months.

Maternity and Paternity Leave

For expectant parents, Singapore's employment laws offer generous leave benefits. Mothers are entitled to 16 weeks of paid maternity leave if they meet certain eligibility criteria. On the other hand, fathers can avail 2 weeks of paid paternity leave. Understanding such family-friendly benefits is essential when planning to work from abroad.

Childcare Leave

Furthermore, parents of Singaporean children below the age of seven are eligible for six days of paid childcare leave per year. This provision also applies to parents of non-Singaporean children who have worked for their employer for a continuous period of at least three months.

Other Types of Leave

The Singapore Employment Act also covers other types of leave, including marriage leave, compassionate leave, and examination leave. These are typically dependent on individual company policies.

Non-Statutory Benefits and Perks

Singapore's robust employment landscape isn't only about compliance with Singapore employment law but also about fostering a conducive work environment. The city-state is known for its myriad of non-statutory benefits and perks, also known as employee benefits, that companies often offer to attract and retain the best talent. These benefits, not mandated by law but greatly valued by employees, significantly enhance the work experience, particularly in the tech sector.

Health and Wellness Benefits

The realm of health and wellness has seen growing attention in recent years, with companies now recognizing the value of a healthy workforce. In Singapore, some employers go beyond mandatory healthcare contributions to offer free healthcare benefits to their employees. These benefits could range from comprehensive health insurance coverage to wellness programs that encourage regular exercise and mental well-being.

Learning and Development Opportunities

In the ever-evolving tech world, continuous learning is key. Many Singapore-based companies invest in the learning and development of their employees. This can take the form of sponsored courses, workshops, or in-house training sessions. By facilitating their employees' professional growth, companies can keep their teams updated with the latest advancements in their field, leading to increased productivity and innovation.

Additional Leave Benefits

Some companies in Singapore offer additional leave benefits beyond the statutory requirements. This could include increased annual leave, sabbatical leave options, parental leave for both fathers and mothers and even 'birthday leave'. Such practices can significantly enhance employee satisfaction and retention.

With careful planning and execution, these added perks can become an integral part of a company's employment strategy in Singapore.

Termination of Employment in Singapore

The process of terminating an employee in Singapore, whether it's a remote worker or an in-office staff member, is guided by stringent regulations as outlined in the Employment Act. Employers need to understand these regulations comprehensively to ensure compliance, preserve their reputation, and avoid legal consequences. Here, we delve deeper into the different aspects of employee termination.

Notice Period

A key component of Singapore's termination procedures involves the notice period. Either the employer or employee can terminate an employment contract by serving the required notice period, which is typically mentioned in the employment agreement. If the notice period is not specified, the Employment Act's regulations apply, mandating a notice period of between one day to four weeks, depending on the length of service.

Termination for Poor Performance

In situations where an employee's performance is not up to the mark, it becomes essential for businesses to understand how to terminate an employee for poor performance compliantly. Employers need to demonstrate a fair process, including clear communication about performance issues, ample opportunities for the employee to improve, and impartial evaluation of performance.

Offboarding Remote Employees

Offboarding, a crucial aspect of termination, involves the formal process of transitioning an employee out of the company. With the rise in remote work, understanding how to offboard remote employees compliantly is paramount. This process should ensure a smooth transition while also respecting the rights of the employee and may include elements such as final payments, return of company property, and exit interviews.

Legal Termination

Legally terminating an employee necessitates compliance with not just the notice period, but also other elements such as compensation for dismissal and providing a written explanation for the termination in some cases.

Understanding and complying with Singapore's termination regulations promote a fair and respectful workplace, ensuring both the employer's and employee's rights are protected. By maintaining transparency and adhering to legal guidelines during the termination process, companies can manage this challenging event more efficiently and ethically.

Data Privacy and Confidentiality

In an era where data breaches and cyber threats are ever-present, maintaining data privacy and confidentiality is an absolute necessity. Especially in a tech-savvy society like Singapore, where most business processes are digital, information handling demands utmost vigilance and robust protocols. For tech talents working remotely, and the companies employing them, understanding Singapore's stringent data privacy laws is essential.

The Personal Data Protection Act (PDPA)

The linchpin of Singapore's data privacy regulations is the Personal Data Protection Act (PDPA). The Act governs the collection, use, and disclosure of personal data by organizations, ensuring that individuals' personal data is safeguarded.

Under the PDPA, organizations must notify individuals of the purposes behind collecting, using, or disclosing personal data and obtaining their consent beforehand. They are also responsible for ensuring the information's accuracy and security. Failure to comply with these regulations can lead to severe penalties, demonstrating the seriousness with which data privacy is taken in Singapore.

Employee Data: The Risk of Remote Work

As remote work continues to gain traction, the handling of employee data has become a significant consideration for organizations. Employee data can range from personal details like names and addresses to more sensitive information like bank details or medical records. Safeguarding this information is not only ethical but also a legal requirement.

For tech companies building distributed teams, understanding the legal and tax risks of remote work is essential. It's important to ensure that employees' personal data is protected, regardless of where they are located.

Data Privacy and HR Compliance

Data privacy is intrinsically linked to HR compliance. HR departments often handle a significant amount of sensitive employee data and must take the necessary precautions to protect it. Employers need to be aware of common HR compliance mistakes and how to avoid them, including those related to data privacy.

Ensure Compliance in Singapore With Skuad

Maintaining compliance with Singapore's employment laws not only enables your organization to stay above unnecessary fines and penalties but also ensures a conducive work atmosphere.

Skuad, as an exceptional Employer of Record solution, enables organizations to compliantly hire contractors and employees across over 160 countries, including Singapore. Legal liabilities and fines are no longer a concern with Skuad, as the platform guarantees your organization's full compliance with the respective laws and norms of each country.

Schedule a demo with Skuad to learn more.

FAQs

Are working hours long in Singapore?

The standard work hours in Singapore are from 9 am to 6 pm. While this might appear longer than most, it is quite common across various industries in Singapore.

Does Singapore have an overwork culture?

Yes, Singapore has one of the longest weekly work hours in the world. While most countries in the world observe a 40-hour weekly work schedule, the standard weekly work hours in Singapore is 45 hours. Also, employees in Singapore are entitled to just two weeks of annual leave.