- Overview: Singapore
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Contractor vs. employee: which is better?
- Expand without a company set up
Global HR Compliance in Singapore
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Singapore Guide below will help you understand the nuances of labor legislation in the country.
There are two main reasons for companies hiring foreign workforce:
- Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
- Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.
After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.
If you need to hire foreign workforce in Singapore so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.
With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.
We are experts in global workforce employment in Singapore, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Singapore.
See the guide below for a general overview of labor rules and regulations in Singapore. Or contact us if you need to employ workers in Singapore or would like to get more details.
Hiring and Firing Workforce in Singapore Guide
# Employment Agreements
There are no rules relating to the duration of employment contracts. The Employment Act states that a contract of employment can be terminated by either party at any time on notice (the length of which varies depending on the duration of the employee’s service), with the minimum amount of notice to be one day, where the employee has been employed for less than 26 weeks.
#Employment Termination and Severance Pay (Dismissal)
An employer is required at common law to comply with the terms of the employment contract in making payments upon termination. This will generally include all outstanding payments of salary to the date of termination, pay in lieu of notice (if applicable) and any other contractual entitlements, such as accrued but untaken leave and commissions. For employees to whom the Employment Act applies, where the employee’s employment has been terminated by the employer, the employee must be paid their total salary and any other sum due on the day of termination or within three days of termination date. Where an employee’s employment terminates at his/her instigation, total salary is to be paid either on the date of termination (where notice has been given by the employee) or before the expiry of seven days after termination (if no notice is given by the employee or if notice has been given but the employee terminates his/her employment before the expiry of the notice period).
#It is prohibited to dismiss
While there is currently no standalone anti-discrimination law in Singapore, there are various statutes which provide specific protection against the following types of dismissal:
Dismissal of Pregnant Employees
- An employer is prohibited from giving notice of dismissal to a female employee while she is on maternity leave or where such notice will expire during her maternity leave.
- A notice of dismissal given without sufficient cause by an employer to a female employee at any time of her pregnancy where she has served the employer for three months or more immediately preceding the day notice is given, shall not deprive her of any payment to which, but for that notice, she would have been or become entitled.
- A notice of dismissal given to a female employee by her employer on the ground of redundancy or by reason of any reorganisation of her employer’s profession, business, trade or work at any time of her pregnancy (as certified by a medical practitioner before the notice of dismissal is given), where she has served the employer for a period of three months or more immediately preceding the day the notice is given, shall not deprive her of any payment to which, but for that notice, she would have been or become entitled.
Dismissal for Age
The Retirement and Re-employment Act prohibits the discharge of an employee who is below the prescribed minimum retirement age (which is 62 years as at the date of this write-up) solely on account of his or her age. Where re-employment is not offered to eligible employees, the employer will have to pay a one-off Employment Assistance Payment, the quantum of which is based on the principles set out in the Tripartite Guidelines on Re-employment of Older Employees.
Dismissal for Union Association or Association Membership
Under the Industrial Relations Act, an employer is not permitted to dismiss or otherwise discriminate against an employee on account of, inter alia, his or her involvement or proposed involvement with his or her trade union or an association that has applied to be registered as a trade union.
Singapore law also protects employees who are called for national service through the Enlistment Act. An employer is not permitted to dismiss an employee solely or mainly for the reason that the employee has been called, or is likely to be called, for national service, regular service, mobilised service in the Police Force, or voluntary service in the People’s Defence Force, or in the Special Constabulary. However, if the employee is employed only for an agreed definite or certain period of time by the employer, and if the employee is subsequently called up for full-time national or regular service, the employee may be discharged from employment. The Workplace Safety and Health Act expressly provides that an employer must not dismiss or threaten to dismiss an employee as a result of:
- The employee’s assistance in safety and health-related matters and in inspections or investigations relating to violations of the Workplace Safety and Health Act.
- The employee seeking assistance in relation to a safety and health matter.
- The employee’s participation as a member of a workplace safety and health committee.
- The employee’s compliance with a remedial order or stop-work order. B. Discrimination Claims.
Generally, under Singapore law, termination of employment must be in accordance with the terms of the employment contract. Generally, at common law, a contract of employment may be terminated by either party (for any or no reason) by the giving of the required period of notice of termination to the other party. In the absence of an express term as to the required period of notice, a term will be implied under the common law that requires the terminating party to give “reasonable” notice of termination. What is reasonable will depend on all the facts and circumstances of the case, including the nature of the role, level of seniority, period of service and industry practice, and may range from a short period, such as one week, up to 12 months, or potentially even longer.
The following minimum notice periods apply to employees covered by the Employment Act:
- Employees who have been employed for less than 26 weeks—one day’s notice.
- Employees who have been employed for more than 26 weeks but less than two years—one week’s notice.
- Employees who have been employed for more than two years but less than five years—two weeks’ notice.
- Employees who have been employed for five years or more—four weeks’ notice.
Under the Employment Act, the period of notice prescribed under the contract of employment must be the same for both the employer and the employee, and either party may make a payment in lieu of notice. Under the common law, if either party repudiates the contract of employment, which would include, in the case of the employee, engaging in serious misconduct, then the other party will be entitled to treat the contract as at an end, without providing any period of notice. In the case of an employee engaging in serious misconduct, and corresponding termination by the employer, this would be a case of “summary dismissal.”
There is no statutory entitlement to severance pay in Singapore, and any severance entitlements would arise from the relevant employment contracts or collective bargaining agreement. In practice, many employers provide an ex gratia payment upon retrenchment, which may correlate with the employee’s length of service.
#Employee Benefits and Contributions
Mandatory benefits required by law to be provided by an employer
- Social Security
- Pension Fund
- Health Insurance
- Vacation Days
- Public Holidays
- Sick Leave
- Maternity leave
- Paternity leave
Non-mandatory benefits that are offered by an employer
- Healthcare, well being and personal benefits – Many of Singapore companies offer medical insurance plans that extend to dependants and typically cover personal accident and hospitalization.
- Per Diem – For travel related jobs, many companies provide a per-day allowance, transportation allowance or reimbursement of actual expenses while traveling. The per diem amount depends on the place the employee is travelling to.
- Relocation package – Most companies provide a relocation allowance to employees who have to move with their family from their home country to Singapore. An expatriate compensation package typically includes: paid shipping of personal effects, paid air fare, free or subsidized housing, payment of utility bills, paid childcare and payment of school fees for children. Some employees come on “full expat” terms, some on “semi expat” terms and some others on “full local” terms. It is a common practice to accommodate employees in a serviced apartment or hotel, paid for by the company for certain duration until they find suitable accommodation.
- Employee stock purchase plans – Some companies provide employee stock purchase plans, especially to senior employees.
- Other additional perks – Other perks may include: paid corporate memberships, sponsoring employee training programs and educational courses, providing restaurant discount vouchers, mobile phone plans, paid gym/club memberships, organize sporting activities, team parties and outings, staff referral schemes, sabbaticals etc.
Probationary periods are commonly used in Singapore. There are no statutory prescriptions around the use of probationary periods. There are no specific advantages or disadvantages to using or not using a probationary period. Any applicable statutory minimum entitlement must be met, whether or not the employee is on probation. However, it may be easier to justify dismissal during a probation period for the purposes of the wrongful dismissal regime. The length of a probationary period will differ depending on the employee’s seniority, skill level, and qualifications. Generally, in Singapore, probationary periods of three to six months are common.
The overtime pay of other employees is governed by their individual employment contracts. Any work performed in excess of eight hours in one day or 44 hours per week is considered overtime for which employees must be paid at least one and a half times his or her basic hourly rate of pay. The maximum permitted overtime in any one month is 72 hours, unless the Minister grants an exemption.
Hours of work are regulated only for those employees who are summarized below:
- Except in the special cases, an employee’s ordinary hours of work are capped at eight hours per day and/or 44 per week.
- An employee’s ordinary hours of work may be extended by agreement with his/her employer in certain cases, but this extension is subject to a cap of nine hours per day and/or 48 hours per week.
- Additionally, an employee must not be required to work more than six consecutive hours without a break. However, these limits can be varied by agreement under the contract of employment, subject to certain limitations set out in the legislation.
- Employees are entitled to one rest day per week (with Sunday being the default).
all employees who have a minimum of one year’s service are entitled to seven days’ to 14 days’ annual leave per annum, depending on the employee’s length of service with the employer. The amount of annual leave to which employees who have at least three months’ service but less than one year’s service are entitled is calculated on a prorated basis based on the number of full months worked. Employees must use their annual leave entitlement no later than 12 months after the date on which the entitlement arises, or they will lose the entitlement, unless the employment contract provides for unused annual leave to be carried over. If the employee’s employment is terminated by the employer (other than for misconduct), then any accrued but untaken annual leave must be paid out on termination of employment.
All employees who have at least six months’ service are entitled to 14 days’ paid sick leave per annum if no hospitalization is necessary. Sick leave of up to 60 days in total is available to employees in the case of hospitalization. An employee with at least three months’ service but less than six months’ service is entitled to sick leave on a pro ratabasis. Sick pay is paid by the employer. In order to be entitled to receive sick pay, the sick leave must be certified by a medical practitioner appointed by the employer (or a recognized medical officer if no such practitioner is appointed), and the employee must attempt to inform the employer of the sick leave within 48 hours of its commencement. Sick pay is payable at the gross rate of pay (excluding any shift allowances where the leave does not include hospitalization). The gross rate of pay refers to the total amount of money to which an employee is entitled under his/her contract of service. It does not include overtime payments, bonus payments, annual wage supplements, reimbursements, or incentive payments.
The maternity leave scheme in Singapore is complex, but, generally, all employees are entitled to eight weeks’ fully paid maternity leave and an additional four weeks’ unpaid maternity leave.
Fathers are entitled to two weeks’ paternity leave following the birth of a child if:
- He is the natural father of the child.
- He is, or will be, married to the mother of the child within 12 months after the child’s birth.
- The child is, or will be, a Singapore citizen.
- He has served his employer for at least three calendar months prior to the birth of the child (or has continuously worked for at least three months prior to the birth if self employed and has lost income as a result of not working during the paternity leave period).
Acumen International can help you fast-track your possibilities of entering and expanding your business in Singapore by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.