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Can incentive schemes be tied to statutory sick leave utilisation?

No. From 1 January 2023, companies with incentive schemes that consider statutory sick leave utilisation will face enforcement action.

Tripartite partners recognise that incentive schemes that consider statutory sick leave utilisation are not in the best interest of employees and the workplace.

Employees who are unwell should seek medical attention for their own, and their co-workers’ well-being, and they should not be disincentivised from doing so.

What are some examples of prohibited schemes?

Companies must not:

  • Provide incentive to employees for not taking any statutory paid sick leave for any period of time.
  • Offer the encashment of unused statutory paid sick leave.
  • Use the number of paid sick leave days taken as “demerit points” during appraisal and promotion.

What are some examples of permissible schemes?

Companies can provide:

  • Incentives for not taking no-pay leave.
  • Flexible benefits (e.g. covering medical treatment) that are encashed at the end of the year if not used.
  • Incentive for hitting key performance indicator (e.g. incentive for handling at least X calls per month, incentive for selling Y quantity of products).

For further advice on whether an incentive scheme is permissible, companies can approach SNEF (for SNEF Members).

Unionised companies can approach NTUC, and should work with the union to mutually agree on an alternative scheme.

Employers should communicate the incentive schemes clearly to their employees.

Employees who need further assistance can approach TAFEP.