On 2 October 2018, the Parliament of Singapore tabled the Employment (Amendment) Bill (the “Bill”). The Second and Third Reading of the Bill is expected to be sometime in November 2018. If the Bill is passed by the Parliament in its present form and with the President’s assent, the amendments to Employment Act are scheduled to take effect on 1 April 2019.
This post is the first of our series on the Bill where we will discuss the proposed amendments to the Employment Act (Cap. 91) (the “EA”) and how it may affect you, whether you are an employee or an employer. The Bill can be found here.
I. The Big Change
The biggest amendment which the Bill brings would be the removal of the salary cap of SGD4,500/month for professionals, managers and executive (“PMEs)”. This group of PMEs is presently excluded from the EA.
The removal of the salary cap will mean that nearly all employees (save for public servants, domestic workers and seafarers – who are covered under separate legislations) will be entitled to the benefits conferred by the EA.
Employers should conduct a comprehensive review of their employment contracts to ensure that they will be compliant with the EA when the amendments take effect. In a similar vein, employees should familiarise themselves with the statutory benefits conferred by the EA and understand any additional benefits which they may have.
The statutory benefits conferred by the EA include a minimum of 7 days of annual leave (the material section of the EA will be shifted out of Part IV of the EA which only covers certain employees and will be further discussed below), 14 days of paid sick leave and 60 days of paid hospitalisation leave, maternity benefits and childcare leave, and redress for wrongful dismissal.
II. Part IV of the EA- Raising the Salary threshold
The amendments will see the monthly salary cap in respect of non-workmen increased from SGD2,500 to SGD 2,600. This increase will see more non-workmen benefiting from benefits conferred by Part IV of the EA such as stipulated mandatory rest days, maximum hours of work, and statutory overtime pay.
In this regard, it is important to note that the salary cap for calculating overtime pay for non-workmen will also be increased to SGD 2,600.
Employers should take note of these amendments should their employee(s) now fall within Part IV of the EA as there are serious consequences should an employer not adhere to the provisions Part IV of the EA or fail to pay any salary according in to the provisions Part IV of the EA such as a fine not exceeding $5,000 for the first offence, and heavier fines and a possible jail term for subsequent offences.
Look out for our upcoming posts on the Bill where our discussions will include the revamped Employment Claims Tribunal, wrongful dismissal claims; obtaining consent from the employee when making deductions to salary and more!
Please contact Kim Seah at Kim.Seah@incisivelaw.com for any employment law related enquiries.