National Wages Council proposes pay hike range for low-wage workers

A cleaner clearing away dirty dishes at an Ang Mo Kio coffee shop..
A cleaner clearing away dirty dishes at an Ang Mo Kio coffee shop..PHOTO: ST FILE

Council recommends increments of $50-$65 instead of fixed sum, to allow for flexibility

A monthly pay rise of $50 to $65 is being recommended by the National Wages Council (NWC) this year for low-wage workers earning a basic salary of up to $1,100, in a continuing effort to lift their incomes.

And in a nod to tough economic conditions, the NWC is suggesting a range of pay increments instead of a fixed sum as it did in the past four years.

The range is not to put a cap on the pay increase but to allow for flexibility, said NWC chairman Peter Seah yesterday when he announced the annual wage guidelines. "It is to take into account affordability. Employers should give more if they can afford it."


Singapore's economy is expected to grow 1 per cent to 3 per cent this year.

For low-wage workers earning more than $1,100, the NWC recommends that they be given a "reasonable" wage increase and/or a one-off lump sum based on their skills and productivity.

In general, the NWC calls on companies that have done well and have good prospects to reward workers with pay hikes. But those that have not or have poor prospects should exercise wage restraint, with "management leading by example", it said.

The move to raise the basic wage of low-income workers has been one of the NWC's major efforts.

The move began in 2012, when it backed the National Trades Union Congress in its push for low-wage workers earning up to $1,000 each month to receive a built-in pay hike of at least $50. And since 2013, the sum was raised to $60. The salary bar was raised to $1,100 last year.

But non-unionised companies have largely ignored the NWC guidelines, which are not legally binding.

Only 18 per cent of companies, the majority of which are not unionised, gave their low-wage workers a pay rise of at least $60 last year, as specified by the NWC. In contrast, half of the unionised companies here followed the NWC guidelines.

Still, workers have generally benefited from the guidelines.

Local workers earning a monthly pay of up to $1,100 fell from 130,100 in 2014 to 112,900 last year, said the Ministry of Manpower.

With local employment growing in the same period, this shows workers have moved out of the $1,100 income bracket.

The Singapore National Employers Federation will step up efforts to educate employers on the guidelines. "For companies that really cannot afford it, we are not pushing," said its president Robert Yap.

The Government yesterday accepted the NWC guidelines, which take effect for one year from July 1.

The NTUC said more can be done for workers in outsourced jobs who face possible pay cuts when contracts are renewed.

The Government, noting that buyers of outsourced services need to play a part, said it will lead by example.

It "strongly encourages suppliers to the public sector to adopt NWC recommendations on wage increments for their workers".

A version of this article appeared in the print edition of The Straits Times on June 01, 2016, with the headline 'NWC proposes pay hike range for low-wage workers'. Print Edition | Subscribe