3 Things all companies in Singapore must have come April 1st 2016

Come April 2016, The Ministry of Manpower (MOM) in Singapore is going to start a special framework to penalise companies who breach the employment act. They call these breaches “civil breaches”.

These breaches, for a start, are :

  • Failure to issue an itemised payslip
  • Failure to issue Key Employment Terms in writing
  • Failure to maintain detailed employment records
  • Provision of inaccurate information to officers of MOM without the intention to mislead and defraud

This is quite a big thing for almost all small companies considering the Employment Act covers all employees in Singapore who are paid under $4500 monthly with the exception of

  • Seafarers
  • Domestic workers
  • Civil Servants

It does not matter if you are a contract staff, part time staff, full time staff, manager, boss, executive, waiter or commission based. If you are earning less than $4500, you are covered under the employment act

This means that a large number of people that are covered under the employment act and there are many small companies that probably do not even know they have staff who are covered under the employment act.

This is all due to an amendment of the Employment Act which will kick in on April 1st 2016.
The changes mandate that all companies in Singapore must comply with 3 points for employees they hire who are covered the employment act (remember this is almost all employees who are earning less than $4500).

The 3 points are
1) Issuing an itemised payslip to employees
2) Issuing key employment terms
3) Maintaining employment records

These changes were announced during a second reading speech for the Employment (Amendment) Bill on 17 August 2015 by Mr Lim Swee Say, Minister for Manpower.

When you think about this, its very simple actually. Just make sure that all the employees you have, and are paying for, know what they are being hired for, when they are supposed to work, keep a record of what they are being paid and when they work.

This will actually make your whole company a lot more organised and force you to keep a record. Personally, I feel this is good, at the very least, at least you will be sure you keep a proper record of salaries being paid and the dates during which employees work. This is often a huge “let go” by companies who think things like this are a waste of time.

My guess is this will also help mediate disputes faced by employees and employers about unclear working hours, salary and leave balances.

I would suggest using some kind of software to help keep these records as there are no physical document requirements other than the Key Employment Terms. Payslips can be generated automatically for you and sent to employees via email. A call to MOM has confirmed that e-records for payslips are allowed. Just remember to ensure they are sent within 3 days of paying the salary and at least once a month. Whats more, the software can probably also keep a record of everything for you and help to prepare printable formats when required.

There are many software systems out there that can help with these requirements. One of them is our own Carbonate. Carbonate is a completely online HR management system that allows employers a good way to keep track of and keep in touch with employees. The system is actually more than just a HR management software as it boasts other new features such as a platform for communication and also promotes the issuance of employee benefits.

A basic version of Carbonate, which helps companies comply to the new amendments, is currently available free for the first 100 Small and Medium Sized companies who sign up at http://carbonateapp.com/pricing.

I hope that you have found this article useful. Please do help to share this article with your friends and family to help prevent them from being penalised unnecessarily.

The points in this post are purely of my own thoughts and suggestions and do not represent what SodaInMind Pte Ltd feel. This post was written on 25th February 2016 and is to the best of my knowledge, true, if there is any part that is misleading, please do tell me and I will remove or edit it. Please feel free to contact me at info@sodainmind.com