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In Singapore, employers are required to establish a local legal entity and leverage local resources to manage compliance, payroll, tax, and benefits administration. The intricate nature of employment regulations in Singapore can make it challenging to ensure full compliance with the ever-evolving laws and regulations.
Fortunately, Gloroots offers an exceptional global Employer of Record (EoR) service designed to alleviate the burdens associated with payroll, tax, benefits, and compliance in Singapore. By entrusting Gloroots with these critical responsibilities, you can shift your focus towards nurturing your employees and driving the growth of your company. Let Gloroots handle the intricate details, ensuring adherence to Singapore's employment regulations, while you can devote your energy to strategic initiatives and maximizing business potential.
Risks of misclassification
In Singapore, the issue of "employee misclassification" arises when employers inaccurately classify workers, often labeling them as independent contractors to avoid providing employment rights and benefits that are typically granted to permanent employees. This misclassification occurs even when the workers perform duties similar to those of permanent employees.
By partnering with a Professional Employer Organization (PEO) or Employer of Record (EOR) in Singapore, you can ensure accurate worker classification and the preparation of proper employment agreements. These experienced professionals are well-versed in labor laws and can provide guidance to ensure compliance. They handle precise payroll processing and offer comprehensive benefits, allowing your business to focus on core operations while entrusting employment-related obligations to seasoned experts. With their support, you can avoid the pitfalls of employee misclassification and ensure a fair and compliant workforce.
Legal aspects of employing in
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In Singapore, employment contracts can take various forms and don't necessarily require written documentation to be legally binding. However, it is recommended to provide employees with written employment contracts in Singapore, outlining at least the fundamental terms of employment, including:
- Identities of both parties involved
- Commencement date (and employment duration for temporary contracts)
- Workplace details (optional)
- Job description and responsibilities
- Basic salary, overtime pay, and other forms of compensation or bonuses
- Working hours and rest days
- Allowances and deductions
- Leave entitlements
- Additional medical benefits
- Probation period
- Notice periods for termination of employment
Having a written employment contract helps ensure clarity and mutual understanding between employers and employees, reducing the risk of disputes and promoting a harmonious working relationship.
This might sound overwhelming, but it doesn't have to be. Gloroots eliminates these barriers for you. With Gloroots' Employer of Record offering, hiring and managing employees globally is a piece of cake.
Get an overview of what you need to know when hiring in Singapore. Contact us.
According to Part IV of the Singapore Employment Act, the prescribed limit for the maximum number of working hours in Singapore is 44 hours per week.
For employees who fall under the scope of Singapore’s Employment Act, overtime work is compensated at a rate of 150% of their regular hourly pay.
Employers cannot task their employees for more than 12 hours of work in a single day and 72 hours in a month.
The maximum monthly overtime pay differs depending on the classification of the employee:
Note: Employers must ensure that overtime wages are paid within 14 days from the last day of the salary period.
In Singapore, there is no national minimum wage policy in place. However, there has been a growing trend of setting minimum wages for certain industries, such as cleaning, security, and landscape sectors.
To support low-wage workers who are Singapore citizens and aged 35 and above, there is a scheme called Workfare. This program provides assistance to individuals with a gross monthly income not exceeding 2,300.00 SGD. The Workfare scheme aims to provide additional support and uplift the income levels of eligible workers in need.
Maternity Leave and Paternity Leave
An expectant employee in Singapore, who has been employed for a minimum of three months before the due date and whose child is a Singaporean citizen, is entitled to 16 weeks of paid maternity leave. The maternity leave is divided into two periods: the woman can take up to 8 weeks before the anticipated due date, with a minimum of 28 days, and the remaining weeks after the baby is born.
If the child is not a Singaporean citizen, the maternity leave period is reduced to 12 weeks. For the first and second child, the employer is responsible for paying the regular gross salary during the first eight weeks. The additional eight weeks can be reimbursed by the Government, capped at 10,000 SGD every four weeks or a total of 20,000 SGD per child.
However, starting from the birth of the third child, the Government directly reimburses all 16 weeks of maternity leave, with a cap of 10,000 SGD every four weeks or a total of 20,000 SGD per child.
The minimum requirement for annual leave in Singapore is seven days as mandated by law. As employees gain more years of service, they earn an additional paid day off each year, reaching a maximum of 14 days of annual leave. However, in practice, many employers provide between 14 and 20 paid vacation days per year.
Furthermore, Singapore observes eleven public holidays. If a public holiday falls on a rest day, the following working day is automatically treated as a paid holiday. If a public holiday falls on an employee's non-working day, the employee is entitled to either an additional day off or an extra day's pay, depending on the employer's policies.
After completing six months of service, employees in Singapore are entitled to 14 days of paid sick leave per year. If hospitalization is necessary, the employee is entitled to 60 days of paid sick leave per year.
If the employee has served for less than six months, the number of paid sick days is as follows:
To avail sick leave, employees must inform their employer within 48 hours of their inability to work and provide a medical certificate from a healthcare professional
upon returning to work for any period of sickness.
Other Taxes and Social Security contribution
The termination of the employment relationship can be initiated by either the employer or the employee, following the legally required notice period, as long as it is not for unlawful reasons such as discrimination against protected groups. The termination should also align with the terms stipulated in the employment contract.
When an employee leaves, they should receive payment for any accrued and outstanding holiday entitlement, unless the termination is due to misconduct. Before making the final payment, the employer must obtain appropriate tax clearance from IRAS (Inland Revenue Authority of Singapore).
If the employer terminates the contract or the employee resigns and fulfills the entire notice period, the payment is typically made on the last day of employment or within three days if that is not feasible.
In the event that an employee resigns without providing notice and does not work during the notice period, the payment should be made within seven days from the last day of employment.
During the probation period, which is typically at the beginning of the employment, either the employer or the employee can terminate the contract with a notice period of five days.
In Singapore, when an employee completes two years of service, employment contracts or collective agreements often include provisions for "retrenchment benefits" or severance pay to be paid upon termination. It is customary for these benefits to amount to 2-4 weeks' pay for each year of employment.
In Singapore, the probation period is typically specified in the employment contract or collective agreement and commonly ranges from 3 to 6 months.