Parliament: Progressive wage models can be extended to more sectors, says Sam Tan

The progressive wage model aims to raise the salaries of low-wage workers through skills upgrading and improvements in productivity and is currently mandated in the cleaning, security, and landscaping sectors.
The progressive wage model aims to raise the salaries of low-wage workers through skills upgrading and improvements in productivity and is currently mandated in the cleaning, security, and landscaping sectors. PHOTO: ST FILE

SINGAPORE - Wage ladders rolled out in the cleaning, security and landscape sectors have made "good progress" and could be extended to more industries.

This was announced by Minister of State for Manpower Sam Tan in Parliament on Monday (March 5) during the debate on his ministry's budget.

Mr Tan said the progressive wage model (PWM) has seen "good progress" in the three sectors where it has been made compulsory, but can also benefit rank-and-file workers.

For a start, lift firms and unions are working with the Building and Construction Authority to introduce a voluntary PWM for lift technicians, given the growing demand for such technicians in Singapore, said Mr Tan. The Ministry of Manpower (MOM) is supporting the industry on this, and more details will be announced when it is ready.

The PWM aims to raise the salaries of low-wage workers through skills upgrading and improvements in productivity and is currently mandated in the cleaning, security, and landscaping sectors. It specifies starting wages for workers according to their skill and experience levels, so workers can get higher pay as they upgrade their skills.

Giving an update, Mr Tan said 70,000 workers under the PWMs have benefited from better wages and career progression since they came into effect.

He added that the real wage growth of low-wage workers has exceeded resident median income growth for the past five years.

Employers in all three sectors under the compulsory PWM will lose their eligibility to bid for government contracts if they commit employment-related offences, added Mr Tan.

In the cleaning sector, which implemented the PWM in 2014, the real median gross wages of full-time resident cleaners grew by about 5.7 per cent per annum from 2011 to 2016, said Mr Tan.

 
 
 

Under enhancements to the PWM, more than 41,000 cleaners will also see an increase in their basic wages under the model between 3.4 per cent and 4.6 per cent per annum for six years from July 2017, and will get a mandatory annual bonus equivalent to at least two weeks of monthly basic wages from 2020, he added.

The real median gross wage of full-time resident security guards also grew by 6.4 per cent per annum from 2011 to 2016 since the wage ladder was implemented in 2016, he added.

From 2021, the MOM will also no longer grant overtime exemption for the security industry, which will reduce their current overtime hours, which can be as high as 95 hours a month, to the statutory limit of 72.

For the landscape sector, the real median gross wage of full-time resident landscape maintenance workers has increased by 3 per cent per annum from 2011 to 2016 since it was implemented in June 2016.

"We will continue to look at improving their wages," said Mr Tan.

Responding to labour MP Zainal Sapari (Pasir Ris-Punggol), who suggested mandatory rest areas for workers in the three PWM sectors, Mr Tan said the tripartite partners will study further measures to improve the employment conditions of workers in these sectors.

Mr Zainal also called for a mandatory annual wage supplement (AWS) for low-wage workers, and to compel employers to pay for outpatient treatment for low-wage workers.

Mr Tan said the tripartite partners have agreed that it will be better to allow employers and unions to negotiate the total annual wage package instead of mandating its structure. Currently, the annual wage package is made up of three parts: the monthly fixed component, a monthly variable component and an annual variable, which includes the AWS.

When it comes to getting employers to pay for outpatient treatment, Mr Tan said that doing so may inadvertently affect the employability of workers with poorer health.

He said employers are already required to contribute to their employees' Medisave, and the Government also makes additional Medisave contributions via schemes such as the Workfare Income Supplement (WIS) scheme.

"With our 3Ms (Medisave, MediShield Life and Medifund) and significant government subsidies through schemes such as the Community Health Assist Scheme (Chas), no Singaporean will be denied access to healthcare because of an inability to pay."

On support for older low-wage workers, Mr Tan said they currently receive higher WIS payouts and benefit more from the PWM.

During the Budget debate last week, National Trades Union Congress deputy secretary-general Heng Chee How had called for a review of statutory retirement age, and for a new tripartite committee be formed to look at how to help older people work longer.

In response, Manpower Minister Lim Swee Say said the Tripartite Committee on Employability of Older Workers, which was set up in 2005, will look into issues raised by MPs to better help older workers.