Guide To Singapore’s Employment Act When Starting A Business

Guide To Singapore’s Employment Act When Starting A Business

Setting up a business in Singapore is a seamless activity. All you have to do is engage an incorporation services provider, and you’ll be well on your way to register your business. As a business owner, you should also familiarise yourself with Singapore’s Employment Act when employing people for your team.

Employers and employees in Singapore are free to negotiate and voluntarily enter contracts. However, the Employment Act is Singapore’s primary labour law, and its provisions take precedence over all contractual terms and conditions. Any terms and conditions that contradict or violate provisions of the Employment Act are considered illegal and will be voided.

The Employment Act covers all employees except the following:

  • Domestic workers
  • Seafarers
  • Members of a statutory board or staff of the Singapore Government

However, there are certain parts of the Employment Act (Part IV) which do not cover executives or management staff earning more than S$4,500 per month, in relation to rest days, hours of work and other conditions of services.

Here are key highlights of Singapore’s Employment Act, and clauses you should be aware of when setting up your business.

1. Working hours

Singapore’s Ministry of Manpower has strict rules in place regarding employees’ working hours, conditions, and overtime work. Firstly, a regular workday should not exceed nine hours, with a maximum of 44 hours per week. They also should not work for more than six hours consecutively without a break. On the other hand, shift workers should not work for more than 12 hours in a day. Regardless of the nature of work, as an employer, you are required to provide at least one unpaid rest day for your employees every week.

2. Salary

Singapore’s Employment Act does not stipulate a minimum wage or bonus salary for employees. It only specifies that employees should be paid for work done at least once a month on a date not later than the 7th day after the salary period. However, this does not include overtime payments. Overtime work, on the other hand, should also be paid at least once a month on a date not beyond the 14th day after the salary period.

To manage your company’s payroll, reach out to a reliable accounting services provider to ensure that your employees are compensated on time. At Ackenting Group, we offer payroll services at an affordable rate. Outsource your human resource management to us, and you can be assured of punctual compensation and statutory compliance of the strict and fast-changing Employment Act.

3. Leave benefits

Only employees who have worked with an employer for at least three months qualify for annual leave. Annual leave is calculated on a cumulative basis. After the three-month window is over, an employee qualifies for at least seven days of paid leave for their first year of service. Each subsequent year that the employee spends with the employer earns him or her another day of paid leave. However, many employers provide no less than 14 days of paid leave per year, higher than what is required under the Employment Act.

Similarly, sick leave also varies with the employee’s length of service, pegged at a maximum of 14 days. In addition, up to 60 days of hospitalisation leave can be given, also depending on the employee’s length of service. Employees must also inform employers about the ailment within 48 hours of falling ill and present valid medical certificates to corroborate the claim.

4. Termination of service

Either the employee or employer can terminate an agreement per the contract’s terms and conditions. The respective party needs to give the other party a written notice of termination within the time period that is stipulated on the terms of the contract. Failure to give notice should be compensated by an equivalent monetary sum. However, where there is a willful breach of contract, termination can occur without notice.

Conclusion

To ensure that your company is compliant with the provisions of Singapore’s strict Employment Act, it’s a good idea to engage with a corporate advisory provider that is well-versed with the statutory compliances required – such as Ackenting Group.

As a trusted accounting company, we are able to help you with your company incorporation and corporate financing. Apart from corporate advisory solutions, our team of experienced accountants also provide corporate accounting services to handle all your accounting needs and thoroughly manage your financial records, so you can dedicate your time and energy to growing your business.

If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.

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