FWS allows employers to seek exemption from the statutory provisions on payment rates on overtime, work done on rest days and public holidays.
Under this arrangement, employers are also allowed to compute working hours over a longer period for overtime pay, instead of the current requirements in the Employment Act, i.e. pay overtime for hours worked beyond 8 hours daily or 44 hours weekly.
FWS is relevant to employers who face business downturn and excess manpower in the short term as a result of COVID-19, but want to retain their manpower in anticipation of a business recovery by maintaining the salary of workers even under reduced workload.
For employers that need further cost-cutting measures to tide over longer period of poor market conditions, you can consider other recommended measures in the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, e.g. shorter work week, no pay leave, wage freeze or cuts.
For FWS application due to COVID-19, you need to submit:
- Reasons for application.
- (For unionised company) Declaration form
- (For non-unionised company) Declaration form
- Proof of communication to affected employees of the FWS, e.g. circulars, announcement during town halls, etc.
- Contractual working hours and days per week.
- Work roster.
You can get a short-term approval of up to 4 months to implement FWS. This is to help you manage operating costs, e.g. overtime payment during period of COVID-19.
Employers who need a longer period will be considered if justifications are provided.
Employers and employees (or union, if unionised) must agree on the limit of work hours that can be used to offset overtime. This should take into consideration the work patterns, e.g. cyclical demands, and is subjected to the maximum hours of work under the Employment Act.
As an employer:
- You cannot carry forward unused hours and cannot deduct salaries for these unused hours.
- You cannot deduct your employees’ salaries for unused hours when they resign or are terminated, unless there is mutual agreement with them.
You implement FWS from January to April, and the agreed period is January to February.
- You can make use of unused hours for overtime in January and February.
- You cannot carry forward unused hours in January and February to March and April, which is beyond the agreed period.