Changes to regulate payslips and employment terms

Workers here will now have more safeguards in place should disputes about their pay or job scope crop up. Employers who do not issue itemised payslips or spell out key employment terms in writing for their workers can be fined under changes to a law which were passed yesterday.

The amendments by the Ministry of Manpower (MOM) to the Employment Act - Singapore's main labour law - come into effect on April 1 next year.

Besides making employment terms more transparent, the changes include treating less severe infringements of the law as civil offences, which may attract a financial penalty but not a criminal record. "This process is more appropriate for these types of administrative breaches, and prevents companies from being penalised too heavily, especially SMEs," said Manpower Minister Lim Swee Say, referring to small and medium-sized enterprises, which employ more than two-thirds of the workforce.

Four areas will be covered:

  • Failure to issue itemised payslips;
  • Failure to issue key employment terms, such as working arrangements, main duties and fixed salary deductions, in writing;
  • Failure to maintain detailed employment records; and
  • Provision of inaccurate information to the Commissioner for Labour or inspecting officers without intending to defraud and mislead.

Employers can be fined from $100 to $200 an employee or occurrence, and asked to rectify breaches. Failure to comply will become a criminal offence.

The amendments will "prevent misunderstandings and minimise disputes" between employers and employees, said Mr Lim.

MOM had announced the changes last year to give employers time to adjust, and there will also be a one-year grace period from April next year to end-March 2017.

Under the amendments, MOM also clarified that the employer will have to pay staff holiday rates or give them a day-off if they have to work on non-scheduled public holidays declared by the Government. Labour MP Patrick Tay (Nee Soon GRC), one of six MPs who spoke in support of the changes, said well-kept employee records would minimise long legal tussles and money spent, while Mr Zainudin Nordin (Bishan-Toa Payoh GRC) said that without proper employment contracts, employers may take advantage of this situation in disputes.

Labour MP Zainal Sapari (Pasir Ris-Punggol GRC) said the amendments would help low-wage workers who may not know that they should request payslips and employment terms for their protection. "The likelihood of these workers being short-changed by their employers is very high," he said.

Non-Constituency MP Lina Chiam raised the concern that while the payslip rule "is one step forward towards accountability, it may not be sufficient enough to stem out abuses". Unscrupulous employers may simply ask workers for cashbacks for mistakes made, she said. Nominated MP Thomas Chua said small businesses often need employees to help out in other areas. Mr Lim replied that employers can set a broad job scope at the start of employment but should reach an agreement with staff on any changes later on.

NMP Randolph Tan, a labour economist, said the amendments are good for business, too - they improve human resource management standards so that the country's economic advances are not held back.

A version of this article appeared in the print edition of The Straits Times on August 18, 2015, with the headline 'Changes to regulate payslips and employment terms'. Print Edition | Subscribe