Now that you have successfully been able to incorporate a Singapore company, you are ready to begin hiring employees. Singapore workers are loyal, well-educated and hard-working. The enlightened Government of Singapore has created laws to protect the interests of both employers and employees in our island country. The Singapore Employment Act has many provisions that all employers and workers should understand. Employers will avoid problems by understanding the right way to hire staff.
Here are some “big picture” items to keep in mind as you begin to hire employees:
The revered Singapore Employment Act rules over all employers and employees. Its supremacy cannot be questioned.
- You must follow the rules for hiring local employee and the additional rules for hiring foreign staff.
- You must understand the different hiring procedures for full-time, part-time and contract staff.
- You must be aware of the levies, Provident Fund contributions and other costs you will have to pay.
- You will avoid trouble if you follow the common practices and customs of Singapore
If your knowledge of Singapore hiring practices is a little fuzzy, you’ve come to the right place. 3E Accounting is an expert in this field and offers valuable services and support. This guide will help you comprehend the key labor laws and the ways to go about hiring local and foreign employees the Singaporean way. We target an audience of new Singapore businesses that are hiring employees for the first time, as you are the folks most likely to make costly and time-consuming mistakes. We present general information that you should not be confused with professional advice.
Employment Act Overview
The Singapore Employment Act is the supreme law of the land that specifies basic employment terms and conditions.
With effect from 1 April 2014, the penalty for failure to pay salary in accordance with the EA will be raised. A first-time offence will be liable to a fine of between $3,000 and $15,000 and/or 6 months’ jail. A subsequent offence will be liable to a fine of between $6,000 and $30,000 and/or 12 months’ jail.
What is the Singapore Employment Act?
- The Singapore Employee Act is the all-powerful and all-seeing legislation that regulates labor and employment issues. You must strictly adhere to the rights, duties and responsibilities carefully crafted into the legislation. You must never contradict the Act’s basic terms and conditions of employment.
- You must determine whether an employee is covered by the Act. If so, any contract you make with the employee must be at least as favorable as the terms specified in the Act.
- Employees not covered by the Act should try to win the best terms and conditions an employer will permit. The contract must spell out all negotiated terms and, once signed by both parties, is legally binding.
To Whom Does the Employment Act Apply?
Most employees are covered by the Employment Act, no matter their nationalities. However, you should be aware of the following exceptions:
- Managers and executives. You are a manager or executive if you have direct authority or can influence the following activities with respect to employees:
- Other primary duties involved in managing and running a business
- Professionals possessing tertiary education, specialized skill or knowledge, and managerial responsibilities. Examples of such professionals include:
- Domestic workers
- Most of the Government and all Statutory Board staff
Part IV of the Employment Act extends additional protections to certain low-paid persons, defined as
- Employees earning up to S$2,000 (Revised to $2,500 with effect from 1 April 2014) basic monthly salaries
- Workers earning up to S$4,500 basic monthly salaries
These additional protections cover the following areas:
- Rest days
- Hours of work and overtime
- Public holidays
- Annual leave
- Sick leave
- Retrenchment benefits
- Retirement benefits
- Annual wage supplements and other variable payments
Key Features of Employment Act