Well recognised worldwide for being a business hub, Singapore has been ranked one of the best cities for businesses thanks to its non-bureaucratic, and friendly labour laws.
Appreciating the high degree of transparency and reliability in business, economic and regulatory affairs allows for global organisations to pique interest in entering Singapore and entrepreneurs to feel encouraged launching start-ups here.
Moreover, having a stable political structure with good corporate governance practice also contributed to our attractiveness to global investors. Whether you are a start-up or a company expanding into Singapore, this comprehensive guide will highlight key legislations, common practices, and guidelines of working and hiring in here.
The Employment Act is Singapore’s main labour law between employees under a contract of service with an employer. It spells out certain basic terms and conditions of employment. These regulations are important legal compliance requirements that companies must follow when hiring, managing, and terminating employees in their capacity.
As of 1st April 2019, amendments to the Employment Act include the extension of core provisions to protect all employees. Previously, core provisions of the act cover all employees except managers and executives (M&Es) earning above $4,500/month. From 1 April 2019, the $4,500/month salary cap will be removed, thereby extending coverage of the EA to all employees. This will benefit an additional 430,000 M&Es who will be covered for core provisions such as minimum 7-14 days of annual leave, paid public holidays and sick leave, timely payment of salary and statutory protection against wrongful dismissal. Public servants, domestic workers and seafarers will continue to be excluded as they are covered separately under other laws, due to the nature of their work.
Additionally, Part IV of the Employment Act, which contains provisions for working hours, days of rest and other conditions of service, only applies only to:
An employment contract is a legally binding agreement between employees and employers. Terms in contract should abide by the minimum statutory requirements as seen in the factors listed under the table below “Key Provisions of the Employment Act: Overview”. Though it is not necessary to be in writing, it is advisable to issue a written contract for easy understanding of each party’s rights, requirements, and obligations. If your employee is covered by the Employment Act, terms drawn out in the employment contract cannot be less favourable than what is mentioned in the Act. On the contrary, if your employee is not covered by the Act, then terms and conditions of employment can be negotiated between mutually between both parties. Once finalised, it should be clearly stated in the employment contract.
| Features | Statutory Requirements | Common Practice |
| Salary | No minimum wage practices. Salary must be paid at least once a month within 7 days after end of salary period. | Remuneration package depends on the position and skills needed. |
| Annual Bonus | No statutory requirements to provide annual bonuses. | Commonly a 13th month payment as annual bonus, in other words 1 month’s salary at the end of a full service year. |
| Hours of Work | Employees earning less than SGD2000 per month will work no more than 8 hours daily or 44 hours per week. They are also not to work more than 6 hours without a break. Shift workers are not allowed to work more than 12 hours daily under any circumstances. | For employees earning more than SGD2000 per month, the conditions under Employment Act do not apply and is free to be determined by mutual agreement. |
| Public Holidays | Yes, public holidays entitled for employees earning above SGD2000 only. | Common for all employees to enjoy the same public holidays. |
| Annual Leave | Minimum 7 days in the 1st year, 1 extra day for additional year of service. | Around 14 days per year. |
| Sick Leave | For employees earning less than SGD2000 per month and has worked for:
| Sick leave benefits for all company employees in Singapore generally correspond to the minimum requirements of the Employment Act. |
| Health Insurance | Requirement to provide medical insurance only applies to Work Permit and S Pass holders. Employers also have existing responsibilities to upkeep and maintain their foreign workers, including the provision of medical treatment. | Dependent on employer. Generally larger companies do provide private medical insurance. |
| Maternity Leave | Eligible female employees that have been employed for more than 3 months are eligible for paid maternity leave benefits up to 16 weeks. | Maternity benefits for all company employees in Singapore generally correspond to the minimum requirements of the Employment Act. |
| Childcare Leave | Eligible female employees that have been employed for more than 3 months are entitled to 6 days childcare leave per year. | Childcare benefits for all company employees in Singapore generally correspond to the minimum requirements of the Employment Act. |
| Termination | Either party can terminate the employment contract by giving a written notice or paying salary in lieu of notice to the other party depending on the period mutually agreed on. | Common practice to provide 2 weeks’ notice during probationary period and 1 month following confirmation. |
| Retrenchment | Employees earning less than SGD2000 per month, shall be paid up all salaries and benefits due on their last day of service. Having worked more than 3 years, company should pay some retrenchment benefits. | Retrenchment benefit packages are largely dependent on company’s ability to provide. |
| Education & Training | No statutory requirements to provide education and training benefits. | Dependent on employer’s willingness to upskill employees. |
Some rules and regulations unique to Singapore’s landscape are as such:
Unique to Singapore is our Central Provident Fund (CPF), a comprehensive social security system that supports retirement. It also addresses healthcare, home ownership, family protection and asset enhancement.
Both employees and employers are to make monthly contributions based on a percentage of their monthly income. It is mandatory and expected of employers to contribute CPF for all local employees, both citizen and permanent residents earning more than SGD50 a month. Failing to comply will result in penalties and imprisonment in Singapore.
Below is a CPF allocation table presenting the different percentage of wage both employers and employees need to contribute monthly. Employers should be aware that these contributions are on top of the agreed monthly wage per employee.
| Employee’s age (years) | Contribution rates from 1st Jan 2016 (for monthly wages above or equals to $750) | ||
| By Employer (% of wage) | By Employee (% of wage) | Total (% of wage) | |
| 55 and below | 17 | 20 | 37 |
| Above 55 to 60 | 13 | 13 | 26 |
| Above 60 to 65 | 9 | 7.5 | 16.5 |
| Above 65 | 7.5 | 5 | 12.5 |
*CPF Contribution table referenced from cpf.gov.sg
The legal age for employment in Singapore is 17 years old. If one is between 13 to 16 years old, they are considered young persons and children where scope of employment is limited and restricted.
| Age Group | Work in a non-industrial setting | Work in an industrial setting |
| Children aged 13 to less than 15 years | Yes, for light duties only | No, unless working with family members |
| Young Persons aged 15 to less than 16 years | Yes | Yes, but employers must notify MOM and submit a medical report |
Employers are expected to prepare tax forms for all employees employed in Singapore to report on yearly remuneration under the Income Tax Act. Companies posting employees overseas for any period exceeding three months will have to notify Singapore’s tax authority (IRAS). Before IRAS provides clearance that all taxes have been paid, employers are to withhold all income.
With liberalised immigration policies and adequate provisions, the Singapore government allowed companies in Singapore to bring in foreign professionals to plug skill gaps and supply shortages especially in the field of ICT, Software and Cyber Security.
With insufficient Singaporean talents of relevant skills and experiences to satisfy crucial positions, it may be difficult to anchor global companies’ investment here. Moreover, job profiles like hard labour construction work and low skilled domestic help may not be attractive or preferred by locals and are mostly taken up by foreign talents. As such, it is important to have a foreign labour market, to create and sustain a wide range of good jobs to meet Singaporeans’ career aspirations.
Foreign employees with valid work passes are covered under the Employment of Foreign Manpower Act where employer’s responsibilities and obligations towards foreign employees are outlined.
The foreign work force can be split into 3 categories:
With a number of criteria to each permit, below is a summarized overview of the different types of passes employers can seek to apply for their foreign workers. The validity of all passes will be up to 2 years, with renewals of up to 3 years depending on each application.
| Types of Passes | Income Threshold | Education | Work | Foreign worker Levy and Quota | Nationalities |
| Employment Pass | At least SGD4500 per month | Good university degree, professional qualifications, or specialised skills | Managerial, executive, or specialised job | No | Open to all |
| S-pass | At least SGD2500 per month | Minimum diploma. May consider technical certificates, such as courses for qualified technicians or specialists | Relevant work experience | Yes, Foreign Worker Levy. Quota: 20% of the company’s total workforce* | Open to all |
| R-pass (work permit) | No minimum | No requirements, unskilled labour | Relevant work experience | Yes, Foreign Worker Levy. Quota varies according to industries | Approved countries |
* From 1st Jan 2021, it will be amended to 10% of total workforce in service sector and 18% of total workforce in construction, marine shipyard, and process sector.
It is important to note that in recent times, the Singapore Government has tightened restrictions on hiring foreign workers. They are constantly on a look out for employers with exceptionally high share of foreign PMETs compared to industry counterparts. Companies that are flagged out will be placed on a watchlist where all EP applications are scrutinised or withheld. In the financial services industry, the minimum qualifying salary for an employment pass will be increased to S$5,000, given higher pay in the sector. To tackle this, companies can increase local headcount with minimum Local Qualifying Salary (LQS) of SGD1400 to offset against the number of S Pass holders under employment, and thereby complying with quota requirements.
Additionally, employers making Employment Pass applications must first advertise on MyCareersFuture portal for at least 28 days, up from the current 14 days, before they can apply for a new EP or S Pass from 1st October 2020. (The advertising rule is currently only applied to EP-level jobs). MyCareersFuture is a portal that aims to provide Singapore Citizens and Permanent Residents job search opportunities. This is to promote fair employment practices and improve Singapore’s labour market transparency. It was emphasized that employers must not favour foreign applicants over local applicants that are equally qualified or equally suitable for the job.
(Disclaimer: All rules and restrictions are updated with the latest announcements as of published date)
All companies in Singapore are expected to adopt fair and merit-based employment practices. According to the guidelines, employers must recruit and select employees based on merit and not discriminatory factors. Age, race, gender, religion, marital status, family responsibilities, and disabilities shall not be taken into consideration. Any form of discrimination on factors not relevant to the role will be in breach of the Tripartite Guidelines on Fair Employment Practices.
In summary:
Experienced recruitment agencies usually have years of candidate base in their system for necessary lookups. To reduce turn around time, companies seek agencies help to profile and short list suitable candidates for the roles available.
Employees are one of the most important nontangible resource a company has, and talents are not easy to come by. Most medium to big sized firms prefer to partner with reliable head-hunters for the hiring of difficult to fulfil positions such as C suite level management roles. Not only can engaging a recruitment agency help to save time, it is also beneficial for companies to get competitive talents to join their organisations.
EPS Consultants is an award-winning HR and staffing service provider within the APAC region with more than 25 years of experience. With strong presence in the recruitment landscape, EPS specialises and provide a comprehensive range of enterprise recruitment, contract staffing and outsourcing services. Headquartered in Singapore with presence in Malaysia, Philippines and Japan, their offices will be able to support a wide range of different job orders.
Traditionally before the age of internet, employers advertise job openings on the classified section of the newspaper. Though a large majority have migrated to job portals on the internet, companies in the line of shipping, mining, machinery manufacturing and service industry still find reasons to publish print ads. Considering that newspaper print ads are not cheap, companies should carefully select the recruitment outlet of choice. Companies can consider The Straits Times, a local publication with the highest circulation in Singapore. It is popular among both recruiters and job seekers.
Job portals are middle-man platforms to link up employers and employees looking to find a job. It has become increasingly popular due to the ease and convenience of use. Jobseekers can apply for as many positions as they want and Employers also get a large variety of resumes for their discretion. Normally to post job advertisements, these job portals charge a premium per subscription while it is free for jobseekers. Some popular platforms in Singapore include: JobStreet, Indeed and FastJobs.
Most Universities and Polytechnics in Singapore organises annual campus recruitment fairs for companies seeking to hire fresh or postgraduates. Students get to understand different job functions, nature of industry and first-hand sharing on company work culture. It is a good platform for employers to spot valuable talents, attract the right people and groom outstanding fresh graduates into future leaders.
Organisers usually plan career fairs annually on a large-scale basis. The event normally holds hundreds of company booths with immediate job vacancies. It can either be a general recruitment fair or an industry specified event. Companies allow for resume drop and even on-the-spot interview opportunities. Being an avenue for employers to get immediate access to potential candidates, jobseekers’ expressed interest is reflected in the attendance.
EPS Singapore is a trusted recruitment partner offering a full range of staffing solutions, including general and IT recruitment, executive search, contract staffing, manpower outsourcing, and RPO.
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