Singapore Employment Act: What Employers Need to Know

Singapore's Employment Act (Cap. 91) is the main legislation governing employment conditions in Singapore. Significantly reformed in 2019, the Act now covers all employees earning up to S$4,500 per month (for workmen) or S$2,600 per month (for other employees) for its core provisions on rest days, hours of work and overtime. Higher-earning managers and executives are covered for key protections including notice periods and annual leave. Here is what employers must understand.

Who the Employment Act covers

The Employment Act applies to employees (not independent contractors) working under a contract of service in Singapore. Following the 2019 amendments, coverage was significantly expanded:

• All employees earning up to S$4,500/month (workmen) or up to S$2,600/month (other employees): full coverage including Part IV provisions on overtime, rest days and hours of work
• Managers and executives earning above these thresholds: covered for key protections including annual leave, sick leave, notice periods, and unfair dismissal remedies, but not Part IV provisions
• Workmen regardless of salary: full coverage including Part IV
• Excluded: public servants, domestic workers, and seafarers have separate legislative frameworks

The Employment Act sets minimum standards - employment contracts can provide more favourable terms, but cannot reduce entitlements below the statutory minimums.

Key entitlements under the Employment Act

Annual leave:

• Minimum 7 days per year for the first year of service, increasing by one day per year up to a maximum of 14 days
• Employees must have served for at least 3 months to be entitled to pro-rated leave
• Annual leave can be taken by agreement between employer and employee
• Unused leave must be paid out on termination

Sick leave:

• Outpatient sick leave: 14 days per year after 6 months' service (pro-rated in the first 6 months)
• Hospitalisation leave: 60 days per year (inclusive of the 14 days outpatient)
• Leave is only paid if the employee is certified unfit by a medical professional and has served for at least 3 months

Overtime and rest:

• Standard working hours: 8 hours per day or 44 hours per week for Part IV-covered employees
• Overtime: 1.5x the basic rate of pay - maximum 72 overtime hours per month
• Rest day: one rest day per week - working on a rest day is compensated at enhanced rates
• Public holidays: 11 gazetted public holidays per year; employees who work on a public holiday are entitled to extra pay or a day off in lieu

Notice periods and termination

The Employment Act sets minimum notice periods for termination by either party:

• Less than 26 weeks' service: 1 day's notice
• 26 weeks to less than 2 years: 1 week's notice
• 2 years to less than 5 years: 2 weeks' notice
• 5 years and above: 4 weeks' notice

Either party may pay salary in lieu of notice. Employees dismissed without just cause or excuse may bring a claim for wrongful dismissal to the Employment Claims Tribunal or Ministry of Manpower.

The Employment Act does not provide for statutory redundancy pay - severance arrangements are typically contractual or established by collective agreement. However, the tripartite partners (MOM, NTUC, SNEF) publish guidelines on responsible retrenchment that employers are expected to follow, including retrenchment benefits of 2-4 weeks' pay per year of service.

The Employment Claims Tribunal (ECT)

The Employment Claims Tribunal is a forum for resolving salary-related and employment disputes quickly and at low cost, without the need for lawyers in most cases. The ECT can hear claims by employees (and in some cases employers) for salary arrears, wrongful deductions, and wrongful dismissal.

• Filing fee is S$30 for claims up to S$10,000 and S$60 for claims above that
• Most claims are resolved through mediation at the Tripartite Alliance for Dispute Management (TADM) before reaching the ECT
• Claims must be filed within 1 year of the dispute arising
• The ECT has jurisdiction for salary-related disputes up to S$20,000 (S$30,000 with union representation)

Recent amendments and practical compliance

The Employment (Amendment) Act 2023 and various Tripartite Guidelines have continued to expand employee protections. Employers should be aware of:

• Flexible Work Arrangements (FWA) Guidelines: from December 2024, employers must have a process to fairly consider FWA requests from employees, and cannot reject without valid reasons
• Tripartite Guidelines on Fair Employment Practices: cover recruitment, selection, compensation, performance management, and grievance handling - while not statutory, adherence is expected and the Fair Consideration Framework applies to work pass applications
• Central Provident Fund (CPF): employers must contribute to the CPF for Singapore citizens and PRs - employer contribution rates vary by age. CPF obligations are strict and penalties for late payment are significant

Practical compliance checklist:

• Ensure employment contracts meet Employment Act minimums on notice, leave and overtime
• Set up CPF contributions for all eligible employees before their first salary payment
• Implement a process for handling FWA requests in line with the 2024 guidelines
• Familiarise yourself with TADM mediation and the ECT - most employment disputes go through this route
• Review your payslip practices - itemised payslips showing earnings and deductions are mandatory

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