Employers that have 10 or more employees, and implement cost-saving measures must notify MOM if the cost-saving measures result in salaries falling below:
- 75% of the gross monthly salary for local employees; or
- 75% of the basic monthly salary for foreign employees.
Employers can refer to the Tripartite advisory on managing excess manpower and responsible retrenchment for all the possible cost-saving measures to consider, in order to manage excess manpower in times of economic slowdown.
Employers should also ensure that the cost-saving measures implemented adhere to the Tripartite advisory on managing excess manpower and responsible retrenchment and other related advisories.
In anticipation of wider adoption of cost-saving measures since the Circuit Breaker period, MOM simplified the mandatory notification process with effect from 7 April 2020, to reduce the administrative burden on employers during this period.
Employers that are required to notify MOM will only need to fill in a notification form, and will not need to separately seek approval from the Controller of Work Passes if they are adjusting the salaries of their foreign employees.
For the purpose of mandatory notifications on cost-saving measures, employers are required to notify MOM on any cost-saving measures that affect employees’ salaries, excluding adjustments to discretionary payments such as bonuses and increments.
Employers may refer to the measures outlined in the Tripartite advisory on managing excess manpower and responsible retrenchment. These measures include, but are not limited to:
- Part-time work / sharing of jobs
- Shorter work week
- Temporary layoff
- No pay leave