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FAQs on managing excess manpower measures

Find out what employers need to do if you implement cost-saving measures.

Requirements

Who is required to notify MOM on cost-saving measures?Show

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.

Why did MOM make adjustments to the requirement and notification form since the start of the Circuit Breaker period?Show

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.

What constitutes a cost-saving measure which employers should notify on?Show

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

Cost-saving measures which affect foreign workers

Will MOM allow employers to reduce the salaries of their foreign employees to below their respective salary criteria?Show

Yes.

For those who are unable to work during this period, we understand if the salaries for some EP and S Pass holders need to be temporarily adjusted below the respective qualifying salaries. Employers should continue to treat their foreign employees fairly and responsibly, taking into consideration the levy waiver and rebate provided by the government.

Do I need to separately seek approval to adjust the salaries of my foreign employees?Show

Employers that implement cost-saving measures will only need to fill in a notification form. They will not need to separately seek approval from the Controller of Work Passes to adjust the salaries of their foreign employees.

Can I reduce the salaries of my foreign employees by a different amount compared to my local employees?Show

All employers should exercise care and fairness in implementing cost-saving measures.

In particular, local employees should not be disadvantaged compared to foreign employees. MOM will look into complaints of such behaviour.

Notify MOM

What information is required to notify MOM on the cost-saving measures?Show

Employers are required to submit a notification to MOM with the following information:

  • Type of cost-saving measure(s) implemented
  • Start date of implementation
  • Duration for cost-saving measure(s) implemented
  • Profile of employees affected
  • Adjustments to monthly salaries of affected employees

Enforcement

What is the penalty for non-compliance?Show

Wilfully refusing to notify MOM within the stated timeline will be an offence and you may be liable on conviction to a fine not exceeding $5,000 or to imprisonment for a term not exceeding 6 months or to both.