MOM warns bosses not to mis-label staff as execs, managers

50 such cases of workers saying they were denied benefits in 2017

There were about 50 cases last year of workers complaining they were denied entitlements like overtime pay, because their employer had classified them as a manager or executive, the Ministry of Manpower (MOM) said yesterday.

Of these, 90 per cent had evidence to back their complaints, it added.

"The MOM takes a serious view of attempts to misclassify employees in order to avoid employer obligations," a spokesman said in a statement.

The ministry, however, added that the incidence of such misclassification has been consistently low compared with other complaints.

The 50 cases make up less than 1 per cent of all cases received by the Tripartite Alliance for Dispute Management (TADM).

Under the Employment Act, workers earning below $2,500 are entitled to benefits like overtime pay, unless they are classified as managers or executives.

The issue of mislabelling of workers was highlighted by labour MP Patrick Tay in a blog post on June 21, in which he said some bosses inflate an employee's job title to avoid paying the worker for overtime work.

Mr Tay said that an estimated 30,000 workers in Singapore are classified as professionals, managers and executives (PMEs), but earn below $2,500 a month.

Under the Employment Act, workers earning below $2,500 are entitled to benefits like overtime pay, unless they are classified as managers or executives.

His post led The Straits Times readers to discuss the issue in the newspaper's Forum Page, with one criticising the practice.

The MOM said that in handling such instances of inflated job titles, the TADM and the ministry are guided by the law as interpreted by the courts.

"In particular, the employee's job title is not a relevant factor. Rather, each case is assessed individually based on the specific scope of the job, such as the level of authority and decision-making powers in the management of business functions, recruitment, discipline, termination of employment and staff performance and reward."

The law has been effective in providing a remedy for affected workers, the MOM added.

It also pointed to a recent High Court case which found that a Bangladeshi worker deployed as a site supervisor was not an executive, and was entitled to pay rates for the rest days he worked.

The judgment "made clear a person who holds a supervisory function is not automatically regarded an executive", the MOM said.

The court had taken into account the nature and level of supervisory powers in deciding Bangladeshi Hasan Shofiqul was entitled to statutory overtime payments.

Where relevant, the MOM and TADM will apply guidance from the court judgment, the ministry said.

Mr Tay told The Straits Times he hopes the estimated 30,000 workers who earn less than $2,500 a month will take a closer look at their employment contracts, job roles and responsibilities to see if they are indeed PMEs who need not be paid overtime.

"Likewise, employers need also to be mindful not to wrongly classify their employees,'' he added.

In March, the MOM had said it will amend the law later this year to extend the core protections in the Employment Act, such as protection against unfair dismissals and late payment of salaries, to every employee, regardless of their pay and whether they are in managerial or executive positions.

Now, the Act covers only those who earn up to $4,500 a month.

But managers and executives will continue to be excluded from additional protections, like overtime pay, provided under Part IV of the Act.

The issue will be studied in future reviews of the Act, the MOM said.

A version of this article appeared in the print edition of The Straits Times on July 03, 2018, with the headline 'MOM warns bosses not to mis-label staff as execs, managers'. Print Edition | Subscribe