SINGAPORE - Employers recognise the need for the measures taken by the Government to uplift the lot of lower-wage workers, but some have concerns about the impact on business costs.

They were responding to the list of recommendations unveiled by the tripartite workgroup on lower-wage workers on Monday (Aug 30) to support the bottom 20 per cent of income earners in Singapore.

Businesses welcomed the transitional support in the form of wage increment offsets to help employers adjust to higher costs, but stressed that any increase to wages will need to be carefully calibrated to ensure that higher wages do not come at the expense of businesses' survival.

The tripartite workgroup put forth 18 recommendations, including extending progressive wages to more sectors such as retail and food services and to occupations such as administrative assistants and drivers, while tightening local qualifying salary (LQS) requirements. These have been accepted by the Government.

The workgroup's report was released a day after Prime Minister Lee Hsien Loong's National Day Rally speech, where he spoke about some of these measures and noted that the cost of higher wages for lower-wage workers will need to be shared by businesses, workers, the Government and consumers alike.

In a statement, the Singapore National Employers Federation (Snef) said that it strongly supports the measures recommended by the workgroup.

But employers do have some practical concerns, such as the timing of the changes, given that businesses are still dealing with the fallout from the Covid-19 pandemic and some are worried that the cost increase associated with higher wages may not be sustainable.

These concerns were factored into the workgroup's recommendations, which not only focus on paying better wages but also progressive business and employment practices, Snef added.

Restaurant Association of Singapore management committee member Andrew Tjioe said that while the association supports the measures to improve wages for lower-wage workers in the food and beverage sector, operators in the industry will be hard-pressed to keep food prices at current levels given rising costs.

Wages can account for between 20 per cent to 35 per cent of overall costs for F&B players, said said Mr Tjioe, who is also president and chief executive of Chinese restaurant chain Tung Lok Group.

He added that aside from wage increases, operators are also dealing with challenges such as labour shortages, increased raw material costs and higher rental charges.

"All these have to be shared among the stakeholders," said Mr Tjioe, referring to both consumers and businesses.

Singapore Business Federation chief executive Lam Yi Young said that the chamber is glad that the workgroup has taken into consideration businesses' concerns, such as those about ensuring a level playing field when these changes are implemented.

This would ensure that companies that pay fair wages will not be unduly disadvantaged in terms of cost competitiveness.

"We hope that the Government, as a major buyer of goods and services, will take the lead in recognising companies that pay fair wages during government procurement (of goods and services), taking into account the added costs in the budgets for government projects, and being open to making price adjustments to existing contracts affected by the Progressive Wage Model changes," Mr Lam said.

Mr Lim Kian Chin, managing director of logistics firm Allied Container Services, said that the move to extend progressive wages to occupations such as drivers and administrative assistants will help those who are currently underpaid in such roles.

But it is unlikely to have a significant cost impact for his company, which provides container transport services, as they currently pay their drivers above the suggested minimum base wage of $1,750 for general drivers.

Specialised drivers or those holding Class 4 and above driving licences would receive at least $1,850 a month under the proposed wage ladder.

Many players in the transportation industry are paying drivers above $2,000 a month, Mr Lim said, noting that the shortage of drivers in the market has already led to higher wages being offered currently.

However, he added that it is important that the wage rungs are set appropriately, so as to not send the wrong signal that driver roles, which are not usually popular among locals, are not good jobs.

Correction note: This article has been updated to reflect the correct name of the logistics firm Allied Container Services. We are sorry for the error.