Singapore Employment Act

The Employment Act of Singapore provides for the basic terms and working conditions for all types of employees. However, not all employees are fully covered under the Employment Act of Singapore.

Table of Content

  • Contract of Service vs Contract for Service
    • Full-time Employment vs Part-time Employment
    • Probationary Employment
    • Fixed Term Employment
  • Working Conditions
    • Hours of Work
    • Rest Day Work
    • Overtime Work
  • Leave Benefits
    • Annual Leave
    • Sick Leave and Hospitalisation Leave
    • Marriage Leave
    • Compassionate Leave
    • Adoption Leave
    • Paternity Leave
    • Maternity Leave
    • Shared Parental Leave
    • Childcare Leave
    • Unpaid Infant Care Leave
  • Employee Compensation Income
    • Minimum Wage
    • Monthly Variable Component
    • Annual Wage Supplement (AWS)
    • Variable Wage Component (Bonus)
    • Central Provident Fund (CPF)
    • Income Tax
  • Termination of Employment
    • Expiry of Contract
    • Resignation
    • Dismissal
    • Retrenchment
  • Retirement and Re-employment

Contract of Service vs Contract for Service

A contract of service defines an employer-employee relationship while a contract for service defines a client and contractor relationship.

A contract of service, is also known as an employment contract, includes the terms of conditions of employment. The contract of service is in effect when the employee turns up for work on the appointed starting date. A contract for service, on the other hand, is not covered by the employment act.

Full-time Employment vs Part-time Employment

The difference between a part time employment from a full time employment lies in the required number of hours of work in a week. An employee who is required to work less than 35 hours in a week is a part-time employee. A part-time employee is also covered under the Singapore Employment Act and is entitled to the statutory benefits.

Probationary Employment

There is no provision within the Singapore Employment Act that dictates the duration of a probationary period. However, it is a common practice to offer probationary employment of 3 to 6 months before offering a permanent employment. A probationary employee is covered under the Singapore Employment Act and is entitled to the statutory benefits.

Fixed Term Employment

A fixed term employment is whereby the service of the employee is engaged only for a definite period of time and the duration of such service is pre-determined and mutually agreed upon before the start of the contract. A contract employee is covered under the Singapore Employment Act and is entitled to the statutory benefits.

Rest Day, Hours of Work and other conditions of Service

An employee shall be covered under Part IV of the Employment Act if the employee is a workmen who does not earn more than $4,500 a month or a non-workmen who does not earn more than $2,500 a month.

It is important to note that Part IV of the Singapore Employment Act does not cover all managers and executives.

Provisions under Part IV of the Employment Act include rest day, hours of work, overtime work and annual leave.

Hours of Work

The normal hours of work in a week in Singapore is 44 hours.

Under common work arrangements; if an employee works 5 days or less in a week, the contractual hours of work is up to 9 hours per day or up to 44 hours a week; if an employee works more than 5 days a week, the contractual hours of work is up to 8 hours per day or up to 44 hours a week.

An employee may also agree to other work arrangements not exceeding an average of 44 hours per work.

Rest Day Work

An employee is entitled to at least 24 hours of rest period per week. The maximum interval between 2 rest days is 12 days.

The employer determines the rest day which can be on a Sunday or any other day of the week. Other than the rest day, the other days of the week that an employee is not required to work is not considered as rest days.

If work was done at the employee request, the employee shall be paid half day’s salary for work done up to half the employee’s normal daily working hours; and 1 day’s salary for work done more than half the employee’s normal daily working hours.

If work was done at the employer request, the employee shall be paid 1 day’s salary for work done up to half the employee’s normal daily working hours; and 2 days’ salary for work done more than half the employee’s normal daily working hours.

Overtime Work

Overtime work is work done in excess of the normal hours of work. For overtime work, the employer must pay the employee at least 1.5 times the hourly basic rate of pay.

However, overtime pay is not applicable to all employees. An employee can claim overtime pay if the employee is a non-workman earning up to $2,500 or a workman earning up to $4,500. Besides that, the overtime rate payable for non-workmen is capped at the salary level of $2,250, or an hourly rate of $11.80.

An employee is not allowed to work more than 12 hours a day and 72 overtime hours per month.

Annual Leave

An employee is eligible to annual leave if the employee has worked for the company for at least 3 months and the employee is covered under Part IV of the Employment Act.

The employee’s annual leave entitlement:

Year of Service Days of Leave
1st 7
2nd 8
3rd 9
4th 10
5th 11
6th 12
7th 13
8th and thereafter 14

The employee’s annual leave entitlement shall be based on the employee’s work year anniversary.

Sick Leave and Hospitalization Leave

An employee is eligible to the statutory sick leave benefit if the employee has worked for the company for at least 3 months; the employee have informed or tried to inform your employer within 48 hours of the absence; and the sick leave is certified by the company’s doctor, company-approved doctor or a government doctor.

The employee’s sick leave entitlement:

No. of months of service completed Paid outpatient non-hospitalisation leave (days) Paid hospitalisation leave (days)
3 5 5 + 10 = 15
4 8 8 + 22 = 30
5 11 11 + 34 = 45
6 and thereafter 14 14 + 46 = 60

It is important to note that the paid hospitalisation leave is inclusive of the paid outpatient non-hospitalisation leave. This means that if the employee used up all 14 days of paid outpatient non-hospitalisation leave, the employee will be left with 46 days of paid hospitalisation leave.

Marriage Leave

There is no marriage leave provision in the Singapore Employment Act.

Compassionate Leave

There is no compassionate leave provision in the Singapore Employment Act.

Adoption Leave

A female employee is eligible for adoption leave if the employee has worked for the company for at least 3 months; the employee’s adopted child is below the age of 12 months at the point of the employee’s formal intent to adopt; the adopted child is a Singapore citizen or becomes a Singapore citizen within 6 months of the adoption; and, if the formal intent to adopt is before 1 January 2017, the female employee must be lawfully married at the point of formal intent to adopt.

The employee’s entitlement to adoption leave:

Date of Formal Intent to Adopt Adoption Leave
On or After 1 July 2017 12 weeks
Before 1 July 2017 4 weeks

Furthermore, adoption leave is reimbursable by the government.

Births Paid by employer Reimbursed by government
First and second First 4 weeks Last 8 weeks
Third and subsequent All 12 weeks

Reimbursement is capped at $10,000 per every 4 week leave taken, including CPF.

The employee can start taking the adoption leave from the employee’s formal intent to adopt and it must be utilized before the child’s first birthday.

Paternity Leave

If employee’s child is Singapore citizen:

A male employee is eligible for paternity leave if the employee’s child is a Singapore citizen; the employee has worked for the company for at least 3 months before the birth of the employee’s child; and the employee is or had been lawfully married to the child’s mother between conception and birth.

The employee is entitled to 2 weeks of paternity leave to be taken continuously within 16 weeks after the birth of the child; or by mutual agreement, to be taken any time within 12 months after the birth of the child.

Paternity leave is fully reimbursable by Singapore government up to $2,500 per week.

If employee’s child is non-Singapore citizen:

There is no paternity leave provision in the Singapore Employment Act. It depends on the company policy for any of such entitlement.

Maternity Leave

If employee’s child is Singapore citizen:

A female employee is eligible for maternity leave under the Government-Paid Maternity Leave (GPML) scheme if the employee has worked for the company for at least 3 months before the birth of the employee’s child and the female employee must be lawfully married to the child’s father, if the child is born before 1 January 2017.

The employee is entitled to 16 weeks of maternity leave to be taken continuously starting 4 weeks before the delivery; or by mutual agreement, to take the first 8 weeks continuously starting anytime within 4 weeks before the delivery and last 8 weeks flexibly over 12 months from the child date of birth.

The employer shall pay the employee’s usual monthly salary during the full 16 weeks of maternity leave if the employee has given the employer at least 1 week’s notice before going on maternity leave, and informed the employer as soon as possible of the delivery. Otherwise, the employee is only entitled to half the payment during maternity leave, unless the employee has a good enough reason for not giving the notice. The employer shall then claim reimbursement from the Singapore government.

For the first 2 deliveries, the employer shall claim reimbursement for up to 8 weeks of the maternity leave capped at $10,000 per 4 weeks or a total of $20,000 per childbirth.

For the 3rd and subsequent delivery, the employer shall claim reimbursement for up to 16 weeks of the maternity leave capped at $10,000 per 4 weeks or a total of $40,000 per childbirth.

If employee’s child is non-Singapore citizen:

A female employee is eligible for maternity leave if the employee has worked for the company for at least 3 months before the birth of the employee’s child and the employee is covered under Singapore Employment Act.

The employee is entitled to 12 weeks of maternity leave to be taken continuously starting 4 weeks before the delivery; or by mutual agreement, to take the first 8 weeks continuously starting anytime within 4 weeks before the delivery and last 4 weeks flexibly over 12 months from the child date of birth.

The employer will pay the employee’s usual monthly salary for the first 8 weeks of the maternity leave if the employee has fewer than 2 living children at the time of delivery and the employee has given the employer at least 1 week’s notice before going on maternity leave, and informed the employer as soon as possible of the delivery. Otherwise, the employee is only entitled to half the payment during maternity leave, unless the employee has a good enough reason for not giving the notice.

Shared Parental Leave

A male employee is eligible for shared parental leave if the employee’s child’s mother qualifies for the Government-Paid Maternity Leave (GPML) and the employee is lawfully married to the child’s mother.

If the birth of the employee’s child is before 1 July 2017, the employee is entitled to 1 week of shared parental leave subject to the employee’s wife agreement. The 1 week will be deducted from the employee’s wife maternity leave entitlement.

If the birth of the employee’s child is on or after 1 July 2017, the employee is entitled to take up to 4 weeks of shared parental leave subject to the employee’s wife agreement. The shared parental leave is allocated in blocks of full weeks, e.g. the employee’s wife can allocate 1 to 4 weeks of shared parental leave which will be deducted from the employee’s wife maternity leave entitlement accordingly.

Shared parental leave is fully reimbursable by Singapore government of up to $2,500 per week.

Childcare Leave

If employee’s child is Singapore citizen:

An employee is eligible for childcare leave under the Government-Paid Childcare Leave (GPCL) scheme if the employee has worked for the company for at least 3 months and the employee’s youngest child is below 7 years old.

The employee is entitled to 6 days of childcare leave per year regardless of the number of children until the year the employee’s youngest child turns 7 years old.

The first 3 days is payable by the employer while the remaining 3 days is reimbursable from the Singapore government up to $500 per day.

If employee’s child is non-Singapore citizen:

An employee is eligible for childcare leave if the employee has worked for the company for at least 3 months and the employee’s youngest child is below 7 years old.

The employee is entitled to 2 days of childcare leave per year regardless of the number of children until the year the employee’s youngest child turns 7 years old.

Childcare leave is payable by the employer.

Extended Childcare Leave

If employee’s child is Singapore citizen:

An employee is eligible for extended childcare leave under the Extended Childcare Leave (ECL) scheme if the employee’s child is a Singapore citizen; the employee has worked for the company for at least 3 months; and the employee’s youngest child is between 7 and 12 years old (both inclusive).

The employee is entitled to 2 days of extended childcare leave per year regardless of the number of children until the year the employee’s youngest child turns 12 years old.

Extended childcare leave is fully reimbursable by Singapore government of up to $500 per day.

If employee’s child is non-Singapore citizen:

There is no extended childcare leave provision in the Singapore Employment Act. It depends on the company policy for any of such entitlement.

 Unpaid Infant Care Leave

If employee’s child is Singapore citizen:

An employee is eligible for unpaid infant care leave if the employee’s child is a Singapore citizen; the employee has worked for the company for at least 3 months; and the employee’s youngest child is below 2 years old.

The employee is entitled to 6 days of unpaid infant care leave per year regardless of the number of children.

If employee’s child is non-Singapore citizen:

There is no unpaid infant care leave provision in the Singapore Employment Act. It depends on the company policy for any of such entitlement.

Minimum Wage

There is no minimum wage in Singapore.

Variable Wage Component

Other than the monthly fixed salary, there may also be several variable wage components such as performance incentive, variable bonus, etc. These variable components are not compulsory unless they are specified in the employee’s contract.

Monthly Variable Component (MVC)

Companies in Singapore are encouraged to adopt a flexible wage system such as the implementation of a Monthly Variable Component (MVC) to manage wage cost.

MVC is a percentage of the employee’s Basic Salary. It allows the employer to make immediate adjustment to the employee’s wages in times of business downturn to maintain sustainability and save jobs.

Annual Wage Supplement (AWS)

The Annual Wage Supplement (AWS), also commonly known as the 13th month payment or bonus is not mandated by the Singapore Employment Act. It is not compulsory by law for the employer to pay the employee an AWS.

Central Provident Fund (CPF)

An employer is required to contribute CPF payment for all their Singaporean and Singapore Permanent Resident employees according to the prevailing CPF rates.

Income Tax

All individuals earning, deriving or receiving income in Singapore need to pay income tax every year, unless specifically exempted under the Income Tax Act or by an Administrative Concession.

An employer who employs 9 or more employees are required to provide the completed and correct return not later than 1st March of the following year.

Termination of Employment

Either the employer or employee can terminate the employment relationship through resignation, dismissal or expiry of the employment contract.

The party who initiates the termination of the employment relationship is required to provide a notice period or salary in lieu of notice.

Both parties must follow the terms and conditions for termination as stated in the employment contract.

Resignation

An employee can resign from their employment any time by providing a written notice, also known as a resignation letter, to the employer. The employee shall then serve the required notice or pay compensation to the employer in lieu of notice.

The employer cannot reject your resignation and it is an offence for the employer to disallow an employee to leave his job.

Expiry of Contract

For non-renewal of the term contract, the employer is required to provide notice period to the employee based on the employee’s cumulative length of service as specified in the Tripartite Standard on the Employment of Term Contract Employees.

Dismissal

A dismissal means that the employer has terminated the employee’s contract of service.

If an employee is unfairly dismissal, the employee can appeal to the Ministry of Manpower within 1 month from the last day of employment.

Retrenchment

A retrenchment is defined as a dismissal of permanent employees, as well as contract workers with full contract terms of at least 6 months by ground of redundancy or by reason of any reorganization.

From 1 January 2017, employers who employ at least 10 employees must notify MOM of the retrenchment within 5 working days, if 5 or more employees are retrenched within any 6 month period, after they notify the affected employees.

Retirement and Re-employment

The minimum retirement age in Singapore is 62 years old. An employer is not allowed to dismiss any employee below this age because of the employee’s age and the employer must offer re-employment to eligible employees who turn 62, up to 65 years old. If an employee is eligible for re-employment but the employer is not able to offer any suitable position, the employer is required to provide an Employment Assistance Payment (EAP) to the affected employee.

For more information, please refer to the Singapore Employment Act, Central Provident Fund, Inland Revenue Authority of Singapore and the Government-Paid Leave website.