Companies will have to issue itemised payslips to employees from today, as landmark changes to the Employment Act kick in.
Employers will also need to provide key employment terms, covering matters such as working arrangements, main duties and fixed salary deductions, in writing.
These were among amendments to Singapore's main labour law passed last year with the aim of preventing misunderstandings and minimising disputes between bosses and workers.
Employers who do not follow the new rules can be fined from $100 to $200 per employee or occurrence.
But the Ministry of Manpower (MOM) reiterated in a statement yesterday that it will "adopt a light-touch enforcement approach" for the first year, and will focus on educating employers about the changes.
Payslips, which can be in hardcopy or softcopy format, must detail items such as a worker's basic salary, deductions and overtime hours. These are crucial to ensuring that both employers and low-wage workers are protected in case of disputes, said labour MP Zainal Sapari.
"Without it, workers who are less educated and less aware of their rights may be taken advantage of by companies," said the assistant secretary-general of the National Trades Union Congress.
For example, some employers tell workers they can get more money in hand if they accept their pay in cash without making contributions to the Central Provident Fund. But workers do not realise they lose out on the employer's contribution, said Mr Zainal.
The change affects all workers covered by the Employment Act, which does not include managers and executives earning a monthly basic salary of more than $4,500.
It comes after recent efforts, such as higher Workfare Income Supplement payouts announced in the Budget last week and the progressive wage model, to raise the pay of low-wage workers.
Since the intention to make itemised payslips compulsory was announced three years ago, most employers have started doing so.
Mr Kurt Wee, president of the Association of Small and Medium Enterprises, said that more than 80 per cent of companies his association surveyed are already giving staff monthly itemised payslips.
But companies using older payroll systems or doing payroll processing by hand may still need time to comply, said Singapore National Employers Federation executive director Koh Juan Kiat.
"Some teething problems such as how detailed the item on overtime pay should be, and integrating two salary payment periods into one payslip, are still there," he said.
To help companies adjust to the changes, MOM has an assistance package comprising templates of payslips and key employment terms, free software for generating payslips, funding and consultation services. Details can be found on its website.