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Key Country Facts

Currency: Singapore Dong (SGD)

Time zone: UTC +8

Official language: Being a country that consists of multinational communities, Singapore has varieties of languages. English is the official language for business and education.

Employment Contracts

The Employment Act is Singapore’s main labour law. It provides the basic terms and working conditions for all types of employees, with some exceptions.

A contract of service defines the employer-employee relationship, including the terms and conditions of employment. The contract must include certain terms and essential clauses, such as hours of work and job scope.

The contract of service specifies the agreed upon terms and conditions of employment between the employer and employee. The contract includes both explicit and implied terms. If your employee is covered under the Act, the contract terms should abide by the minimum requirements under the Employment Act.

Employment contracts can be oral or written. If contracts are in the written form, it is mandatory for all employers to provide employees with a copy of the written employment contract. In addition, employers must obtain their employee’s consent before making any subsequent changes to the terms of the employment contract. It is not mandatory to have a written contract. Verbal contract would still refer to the Act; hence, workers are protected.

Employment contract contains these Key Employment Terms:

  1. Full name of employer,
  2. Full name of employee,
  3. Job title, main duties and responsibilities,
  4. Start date of employment,
  5. Duration of employment (if employee is on fixed-term contract),
  6. Working arrangements (daily working hours, number of working days/week, rest day)
  7. Salary period
  8. Basic salary
  9. Fixed allowances,
  10. Fixed deduction,
  11. Overtime payment period,
  12. Overtime rate of pay,
  13. Other salary-related components, such as bonus or incentives,
  14. Type of leaves,
  15. Other medical benefits,
  16. Probation period,
  17. Notice period, and
  18. Place of work.

Singapore Holidays

There are 10 public holidays in Singapore:

  • New Year’s Day – January 1
  • Lunar New Year – February 12-13
  • Good Friday – April 2
  • International Labour Day – May 1
  • Vesak Day – May 7
  • Hari Raya Puasa – May 13 (subject to change)
  • Vesak Day – May 26
  • Hari Raya Haji – July 20 (subject to change)
  • National Day – August 9
  • Deepavali – November 4
  • Christmas Day – December 25

Vacation

Employees are entitled to paid annual leave if they work for more than three months. Minimum annual leave is 7 days for the 1st year and additional one day for each additional year of service capped at 14 days.

Sick Leave

The number of days of paid sick leave a new employee is entitled to depend on his/her service period:

No. of months of service completed of a new employee

Paid outpatient non-hospitalization leave (days)

Paid hospitalization leave (days)*

3 months

5 15

4 months

8

30

5 months

11 45
6 months and thereafter 14

60

* An employee is deemed to be hospitalized if he/she is certified by a doctor to be in need of hospitalization. He/she does not necessarily have to be warded in a hospital.

Maternity/Paternity Leave

Maternity Leave under Child Development Co-Savings Act will be entitled to 16 weeks of maternity leave if
  1. The child is a Singapore citizen,
  2. The mother has served her employer for at least three months before the birth of the child, and
  3. The mother has given her employer at least one week’s notice before going on maternity leave.
The mother will be paid by her employer for the first eight weeks of maternity leave, and the last eight weeks of maternity leave will be paid by the government.
For a female employee who does not qualify for Child Development Co-Savings Act Scheme, she may be entitled to 12 weeks maternity leave if she fulfills necessary criteria.
The employer is required to pay monthly salary for the first eight weeks of maternity leave. Whether the employer is required to pay salary during the last four weeks of maternity leave depends ultimately on the terms of the employment contract between the employer and employee.
Where there is a mutual agreement with her employer, an employee can take the last eight weeks (9th to 16th week) of maternity leave flexibly over a 12-month period from the child’s birth. The number of days of maternity leave that can be taken flexibly is equivalent to 8 weeks’ worth of working days, up to a maximum of 48 days.
Employers will pay usual monthly salaries during the leave period. They can then claim reimbursement from the Government in accordance with the Government-Paid Maternity Leave (GPML) scheme: 50% for the first two children and 100% thereafter.
From January 1st, 2017, eligible working fathers, including those who are self-employed, are entitled to two weeks of paid paternity leave funded by the Government subject to the agreement of the mother and meet the following criteria under CDCA:
  1. The child is a Singapore citizen born on or after January 1st, 2017,
  2. The father is or had been lawfully married to the child’s mother between conception and birth, and
  3. The father has served his employer for a continuous period of at least three months before the birth of the child.

Termination/Severance

If one party wants to terminate the employment contract, one must give notice to the other party in a written form of termination or resignation letter. A termination letter is mandatory. Any notice of termination, either by an employer or an employee, must be in writing.
Employees who have served the company for at least 2 years are eligible for severance payment (retrenchment benefits). Those with less than 2 years’ service could be granted an ex-gratia payment out of goodwill.
The amount of severance payment depends on what is provided for in the employment contract or collective agreement (for unionized companies). If there is no provision, it will have to be negotiated between the employees (or their union) and the employer. The prevailing norm is to pay a retrenchment benefit of between 2 weeks to 1-month salary per year of service, depending on the company’s financial position and the industry.

Bonus

Annual Wage Supplement (AWS) is also called the 13th month payment. It is a single annual payment on top of an employee’s total annual wage. AWS cannot exceed one month’s salary. AWS is not compulsory, but in common practice, it is paid in December.
Annual bonus is paid usually after the company’s financial year close when the performance of the company can be qualified.

Singapore Social Security

Central Provident Fund (CPF) is a comprehensive social security savings plan that provides working Singaporeans with a sense of security and confidence in their older age. The scope and benefits of CPF encompass the following:

  • Retirement
  • Healthcare
  • Home Ownership
  • Family Protection
  • Asset Enhancement

CPF contributions are based on several factors including age, residency status, and type of earnings. Foreigners are not eligible to participate in the Singapore CPF system. Most participants contribute 20% of salary with a maximum contribution of SGD 1,200. The employer contributes 17% of an employee’s salary with a maximum contribution of SGD1,020. The contribution rates are subject to change.

Singapore Health Insurance Law

For WP holders, employer must buy and maintain medical insurance coverage of at least $15,000 / year. Most EP holders may already have their own medical insurance or want to choose their own, and it’s not compulsory for employers to provide. Singaporeans / permanent residents are eligible for the statutory social security system.

This information does not constitute legal advice.

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