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16 January, 2014

 

Legal News & Analysis – Asia Pacific – Singapore – Labour & Employment

 

Cleaners’ Wages To Receive A Boost


The Singapore Government will soon be introducing an amendment to the Environmental Public Health Act which, when passed and implemented, will in effect create a tiered wage system for jobs in the cleaning industry. This was recently announced by Deputy Prime Minister and Minister for Finance, Mr Tharman Shanmugaratnam.


DPM Tharman emphasised that this change will not be carried out by way of stipulating a minimum wage. Rather, it will be implemented by requiring all cleaning businesses to be licensed under the regulatory purview of the Ministry of Environment and Water Resources. One of the licensing requirements will be that cleaners are to be paid a minimum of $1,000 a month. If the cleaner is trained to handle cleaning machines, his minimum salary will be pegged at $1,400 and if he is employed at the level of cleaning supervisor, his salary would be at least $1,600.


This tiered system of salary benchmarks is referred to as the “progressive wage model” (“PWM”). The benefits of PWM are twofold. Firstly, it provides for better entry-level wages for the workers under its scope. Secondly, it encourages low-skilled workers to undergo training for skills upgrading. The PWM for cleaners was first conceived and promoted by the National Trades Union Congress (“NTUC”). It has since undergone discussions and been adopted by the Government (represented by the Ministry of Manpower (“MOM”)), the employers (represented by the Singapore National Employers Federation (“SNEF”)) and the labour movement (represented by NTUC). They are collectively referred to as the “Tripartite Partners”.


Penalties will be imposed on licensed cleaning companies which do not comply with the salary requirement. Such companies may have their licenses suspended or even revoked. Parties which seek to employ companies without a license in a bid to pay a lower price for such services, will also face penalties.


According to DPM Tharman, the implementation of the PWM for the cleaning industry will come into effect in September 2014. Also in the pipeline is a PWM for another industry which suffers from low basic wages – security guards.

 

Tripartite Guidelines On Issuance Of Itemised Payslips


Another initiative supported by the Tripartite Partners is the Tripartite Guidelines on Issuance of Itemised Payslips (“Tripartite Guidelines”) issued on 13 January 2014.

The Tripartite Guidelines, unlike the amendments to the Environmental Public Health Act, are not statutory in nature and therefore not mandatory for now. However, MOM has indicated in a press release that itemised payslips will become mandatory for all businesses within two years’ time.


Some of the guidance provided in the Tripartite Guidelines includes:


  • All employees should receive itemised payslips.
  • The payslips should be issued at least once a month and at least within 7 days from the end of the month.
  • Where an employee is dismissed or has his contract of service terminated, employers should issue an itemised payslip together with the payment of any outstanding salary or dismissal/termination payment.
  • Itemised payslips should include: basic salary, total allowances and total deductions for each salary period. These are illustrated in Annex A and B of the Tripartite Guidelines.

 

Templates and sample payslips are also available in the Annexes. Companies would be able to refer to and customise these templates for their own use.


When the proposal to require all companies to issue itemised payslips to their employees was first announced last year, some small and medium enterprises expressed concerns over increased costs and the administrative hassle involved, especially if the employees are family or close friends. MOM is aware of this, which is why it is adopting a progressive approach, first launching the Tripartite Guidelines as a “best practices” set of guidelines to allow employers to get used to the idea. MOM is also working with the Infocomm Development Authority of Singapore and SPRING Singapore to provide tools such as simple payslip booklets, downloadable templates, and funding support to enable companies to develop customised solutions for the issuance of payslips. In addition, the other two Tripartite Partners, NTUC and SNEF, will reach out to encourage and assist their members to adopt the Tripartite Guidelines.

 

References:


1. Speech by DPM Tharman Shanmugaratnam at the e2i Best Sourcing Symposium

2. Tripartite Guidelines on Issuance of Itemised Payslips

 

Rajah & Tann

 

Kala Anandarajah, Partner, Rajah & Tann

kala.anandarajah@rajahtann.com


Abdul Jabbar, Partner, Rajah & Tann

abdul.jabbar@rajahtann.com


Desmond Wee, Partner, Rajah & Tann 

desmond.wee@rajahtann.com

 

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