SINGAPORE - It was all smiles for assistant shop manager Sitoh Sau Kuen after she learnt that she will earn $230 more from this month.

The 55-year-old, who works at a ValuDollar outlet in Lorong 6 Toa Payoh, is one of 136 low-wage retail employees with Radha Exports who will take home higher wages now that the Progressive Wage Model (PWM) for the sector has taken effect.

From this month, about 19,000 full-time lower-wage retail assistants, cashiers and assistant retail supervisors will see their salaries rise by 8.4 per cent to 8.5 per cent annually over the next three years.

Firms in the sector have until next February to meet these progressive wage requirements before they face penalties for non-compliance, which include having their work pass privileges suspended.

Before this, Madam Sitoh was earning a basic monthly salary of $2,019, excluding overtime pay. With the salary adjustment, she is now earning a basic monthly salary of $2,249, excluding overtime pay.

"With the salary increment, of course I am happy. On top of that, I can also learn new skills to upgrade myself," said Madam Sitoh, who hopes to pick up skills such as visual merchandising presentation.

She was one of the retail workers Manpower Minister Tan See Leng and Senior Minister of State for Manpower Zaqy Mohamad met during their visit to Radha Exports' building in Pioneer Road on Wednesday.

Radha Exports is the parent company of ABC Bargain Centre and ValuDollar retail chains here.

Besides the PWM for retail, another progressive wage move that took effect this month is the extension of the PWM to include 19,000 in-house workers in the cleaning, security and landscape sectors. The model previously applied only to outsourced workers in these sectors.

Asked whether the increased employee salaries will lead to cost increases for consumers, Radha Exports chief executive Deepak Partab Anandani said every increase in cost definitely trickles down to the company's bottom line retail price.

"We are trying to use our economics of scale, our direct buying strings and going to try and keep increases to single-digit percentages as far as possible," he said.

Dr Tan said the Competition and Consumer Commission of Singapore ensures that firms "do not take advantage of this kind of initiative and obviously profit out of it".

He added that the PWM is the Government's approach to raising the pay of the bottom 20th percentile of workers while encouraging and inspiring them to go for upgrading and upskilling.

"Our end objective is to significantly narrow the gap between low-wage workers and the median (in salary)," he said.

The PWM sets out the minimum pay and training requirements for workers at different levels of skill.

From September this year to February next year, tripartite partners will focus on educating employers on the various progressive wage requirements.

Employers will be given time to adjust and comply. Those who do not comply with the requirements during this transitional period will not face enforcement action.

"We hope and we encourage employers to quickly adapt and also adjust to this PWM," Dr Tan said.

"Importantly, if there's any infringement, we will work with employees, we will support them in terms of the roll-out itself and also point them to the schemes available for them to tap, to ease some of the burdens that they have," he said.

Mr Zaqy said that the Government will support companies in this transition through the Progressive Wage Credit Scheme, which sees the Government co-fund wage increases of lower-wage workers.

For instance, to help retailers cope with the increase, the Government will co-fund 75 per cent of the salary increase for workers earning gross monthly wages of up to $2,500 in 2022 and 45 per cent for those with gross monthly wages of $2,500 to $3,000.

This is quite a significant amount of wage support that is being extended to employers, said Mr Zaqy.

"That's really to help companies adjust in the first year, because many of our moves are within this year and the next," he said.