Issued on 9 June 2020
Updated on 13 September 2020
- The tripartite partners are issuing this updated advisory to guide employers and employees on salary and leave arrangements post-Circuit Breaker. This supersedes the Advisory on salary and leave arrangements during Circuit Breaker issued on 6 April 2020.
Continued support for employees and jobs
- The Jobs Support Scheme (JSS) announced by the Government is meant to support employers to retain and continue to pay their local employees (Singaporeans and Permanent Residents), even during periods of reduced business activity.
- The JSS has been extended by up to seven months to cover wages paid up to March 2021 and the level of support has also been enhanced for more severely affected sectors1. Please refer to this infographic for more information on the additional measures2 announced on 17 August 2020, to protect employees and jobs.
Cost-saving measures could continue
- Some employers have been severely affected by COVID-19. These employers would have worked out cost-saving measures with their unions and employees to save jobs, taking into consideration the JSS. They may, for example, seek employees’ consent to take a few days of no-pay leave each month. Such cost-saving measures that have been agreed to should continue as necessary.
Employers whose businesses are operating
- Local employees who continue to work full-time must be paid their prevailing salaries including the employers’ contributions to CPF.
- Some businesses may take time to resume operations fully, or may need to scale down their operations resulting in excess manpower. The tripartite partners strongly encourage employers to take a long-term view of their manpower needs and responsibly implement any necessary cost-saving measures outlined in the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM).
Employers that cannot resume business operations
- Employers that cannot resume operations3 continue to receive enhanced JSS support. They4 should pay local employees a baseline monthly salary, including the employers’ contributions to CPF, as recommended in Table 1 below:
Table 1: Recommended Salary Arrangements
||Gross monthly salary of local employee up to $4,600
||Gross monthly salary of local employee more than $4,600
|Employer assigns work to employee to complete
||Continue to pay their prevailing salaries, including employer’s CPF contributions.
Use the enhanced JSS payout to provide for a baseline monthly salary to employees, including the employer’s share of the CPF contributions; and
Provide for work done on a pro rata basis – for example, if the employee works half-load (i.e. at 50%), the employer should pay the employee 50% of his monthly salary in addition to the abovementioned baseline monthly salary, subject to a cap of his prevailing salary.
|Employer does not assign work to employee
||Use the enhanced JSS payout to provide for a baseline monthly salary to employees, including the employer’s share of the CPF contributions.
- After implementing the salary arrangements in Table 1 above, if the local employee’s salary is still below their prevailing monthly salary, the employer should, as far as possible, consider the following measures to top up the shortfall:
- Send the employee for relevant or suitable training courses approved for Absentee Payroll Funding5 so that the overall salary paid to the employee during the training period would be mostly supported by the Government;
- Apply for Flexible Work Schedule (FWS) which allows “time-banking” of additional salary payments to offset overtime payments in the future;
- Allow the employee to consume their existing leave entitlements; or
- Grant additional paid leave to the employee.
- Where possible, employers should also allow and support their local employees to take on a second job (e.g. part-time or temporary job with another employer) in companies or public agencies that are operating to make up for the employees’ loss of income. Employers can refer to the Guide on second job arrangements for employees with reduced work hours in response to COVID-19. Employers may also wish to encourage affected employees to consider suitable job opportunities under the SGUnited Jobs Initiative.
- In this extraordinary period, we recognise that some employers can themselves be facing financial difficulties with poor business prospects. As a result, they may not be able to adhere to the recommendations outlined in paragraphs 7 and 8, and may instead need to use the enhanced JSS payouts to cover some fixed overheads to keep the business going. Notwithstanding this, employers should not act unilaterally and put their local employees on prolonged no-pay leave without any baseline salary. Employers should discuss with their unions and employees and come to an agreement on how the JSS payouts are to be used to ensure their business survival as well as provide some salary support to their employees. If there is no mutual agreement, either party can contractually terminate the employment with notice as required under the employment contract or Employment Act.
- In working out such arrangements, employers should give special consideration to their lower-wage employees (e.g. employees who qualify for Workfare Income Supplement) and provide more support to them to alleviate any hardship.
- Employers should ensure that they continue to take care of the well-being of all their foreign employees in Singapore. For Work Permit holders, there is a legal obligation on employers to provide upkeep and maintenance while they are in Singapore.
- As with local employees, foreign employees who work full-time must be paid their prevailing salaries. Some foreign employees may not able to resume full-time work in Singapore because their employers are only allowed to resume operations partially or face poor business prospects. In such instances, we encourage these employers to continue to pay the employees their prevailing salaries by considering the following:
- Allow the employee to consume his existing leave entitlements;
- Redeploy the affected foreign employee to another role within the company;
- Provide the foreign employee with relevant training and upskilling to get ready for the full resumption of business activities; or
- Apply for Flexible Work Schedule (FWS) which allows “time-banking” of salary payments for unworked hours to offset overtime payments in the future.
- If it is not possible for employers to pay prevailing salaries because of the need to reduce wage costs after considering non-wage cost reductions, employers should engage and mutually agree with their unions and foreign employees on the appropriate salary and leave arrangements during this period. If a foreign employee were to be placed on no-pay leave for an extended duration, the employer must obtain his consent in writing. If there is no mutual agreement, either party can contractually terminate the employment with notice as required under the employment contract or Employment Act.
- For businesses that are not in MTI’s permitted list to resume full operations on-site, and for all businesses in the construction, marine shipyard, and process sectors, the Government is extending the Foreign Worker Levy (FWL) waiver till December 20206. The Government is also extending the existing $375 FWL rebate (to all work permit and S Pass holders) to September 2020. This new FWL rebate will replace the $90 FWL rebate for each Work Permit holder, announced by the Government on 27 June 2020 for the months of August and September 2020. Businesses in the construction, marine shipyard and process sectors will continue to receive the monthly $90 FWL rebate for each Work Permit holder from October 2020 to December 2020. Details are as follows:
For businesses in construction, marine shipyard and process sectors:
Notification requirements for cost-saving measures with salary reductions post-Circuit Breaker
- July 2020: 100% waiver of June levies in July (up from 50%), and a $375 FWL rebate per qualifying S Pass and Work Permit holder. Employers who have paid the 50% levies originally due in July will have the amount refunded to them.
- August and September 2020: 100% FWL waiver for levies, and $375 FWL rebate per qualifying S Pass and Work Permit holder.
- October 2020 to December 2021: FWL waiver will be stepped down to 75% for levies due in October 2020, followed by 50% FWL waiver for levies due in November 2020, and 25% FWL waiver for levies due in December 2020. Firms in these sectors will receive a $90 FWL rebate per qualifying Work Permit holder until December 20217.
- Employers that implement cost-saving measures post-Circuit Breaker must continue to notify MOM if the cost-saving measures result in more than 25% reduction in the monthly salaries of their employees and the employer has at least 10 employees.
Reminder to all employers and employees
- All employers are reminded to treat employees, both local and foreign, fairly and responsibly, taking into consideration the significant support provided by the Government to manage business costs and protect jobs. Employers should follow the guidelines on salary and leave arrangements as set out in this advisory (paragraphs 4 to 14) and take reference from TAMEM, where applicable. On the other hand, employees, regardless of nationality, should take due recognition of the employer’s challenges during this crisis and be reasonable when discussing salary and leave arrangements with their employers, especially for those who are unable to resume business.
- For further queries, please contact:
Ministry of Manpower
Inland Revenue Authority of Singapore (for queries related to JSS)
Hotline 1800 352 4728
Ministry of Trade and Industry / Enterprise Singapore (for queries related to list of permitted services)
email@example.com or firstname.lastname@example.org
Infoline 6898 1800
- Please refer to IRAS’s website on the “Extension of the JSS” for more details.
- The Government support measures reflected in this advisory are accurate at the time of issuance.
- Employers can check if they are able to resume operations at https://covid.gobusiness.gov.sg/permittedlist.
- Includes employers of temporary staff and employment agencies who are employers of contract or temporary staff that are deployed to provide services to the service buyer.
- Employers should log on to Enterprise Portal for Jobs and Skills for a list of courses approved for Absentee Payroll Funding.
- The Government support measures reflected in this advisory are accurate at the time of issuance. For more updates on FWL, please refer to the following press release.
- Closer to December 2021, the Government will decide if there is a need to further extend the $90 FWL rebate to another year to December 2022.