In light of the recent pandemic-driven explosion in the popularity of remote work, many companies want to expand their hiring beyond their immediate geographical region. If your company is among these, you may be looking to hire remote job candidates in Singapore.
Singapore’s economy was ranked first among 39 countries in the Asia-Pacific Region on the 2023 Index of Economic Freedom . With its excellent standard of living, high human development indicators , and skilled workforce, Singapore is an excellent destination to expand your team.
However, if you plan to hire remote workers in Singapore , you must understand the country’s employment laws and regulations. Failure to comply with labor laws in Singapore can lead to legal, financial, and other complications for your company.
In this guide to employment law in Singapore, we will help you to gain a more in-depth understanding of the rights of employees in Singapore and your responsibilities as their foreign employer. We’ll also take you through key labor laws and how you can partner with an employer of record (EOR) to stay compliant with local rules and regulations.
Understanding key labor laws in Singapore
There are various laws in Singapore that govern labor and employment. These include the:
Employment Act
Common Law
Child Development Co-Savings Act
Employment of Foreign Manpower Act
Work Injury Compensation Act
Workplace Safety and Health Act
Do employment laws in Singapore vary by state?
Employment law in Singapore is federally enforced. As a sovereign city-state of its own, Singapore is not divided into states.
What do you need to know before hiring a Singaporean employee?
The most common languages spoken in Singapore are English, Malay, Mandarin, and Tamil. 90% of Singaporean employers offer their employees supplemental health insurance to provide care and access above and beyond what the country’s public health system provides.
Companies wishing to hire workers in Singapore must either own a legal business entity within Singapore or work with an employer of record like Remote. An EOR handles typically takes on the legal responsibilities for hiring and paying workers abroad.
Remote’s EOR services can help you hire employees or contractors in Singapore via our local business entity in the country. We can employ your workers in Singapore on your behalf, taking care of managing global payroll , taxes, benefits , offboarding, and legal compliance.
Remote offers localized expertise on labor and employment laws in Singapore, which makes hiring in Singapore fast, easy, and compliant.
The Singapore salary calculator: How to calculate the total cost of an employee in Singapore
If you’d like an idea of how much it costs to hire an employee in Singapore, check out Remote's free employee cost calculator . Our free calculator makes it easy for you to budget for your global hires in Singapore, and beyond.
Statutory employment rights in Singapore
As in most countries, Singapore provides members of its workforce with specific statutory rights concerning labor and employment.
What is the minimum wage in Singapore?
Overall, Singapore has no statutory minimum wage. However, the Progressive Wage Model advocated by the country’s sole trade union mandates a minimum wage in various sectors. Here are some examples:
Workers employed in the cleaning sector must be paid a minimum basic monthly salary of S$1,320.
Security guards must be paid a minimum basic monthly salary of S$1,650
What are the standard working hours in Singapore?
In Singapore, those workers who are covered under Part IV of the Employment Act are entitled to breaks, overtime periods, and a rest day. Their working hours are also regulated.
Part IV of the Employment Act covers local and foreign employees hired as full-time or part-time workers, contractors, or temporary staff.
However, the Act does not protect individuals in the following professions:
Managers and executives
Seafarers
Domestic workers
Statutory board employees or civil servants
The terms and conditions of employment for the above-mentioned workers are covered by their individual employment contracts, instead of Part IV of the Employment Act.
In Singapore, a contract of service defines the working relationship between the employee and the employer, including the employment terms. Each employee's contractual working hours are documented within their contract of service.
Rest day
Employers must provide at least one rest day per week. This unpaid day encompasses a calendar day from midnight to midnight the following day. The maximum allowed length of time between two rest days is 12 days. A monthly roster should be issued before the start of each month to inform the employee of their rest days if the rest days do not regularly fall on Sundays. An employer cannot force an employee to work on a rest day unless there is an emergency or during exceptional circumstances.
Break times
Workers in Singapore should not work more than six consecutive hours without taking a break. If the job requires up to eight hours of consecutive work, the worker is entitled to a meal break lasting at least 45 minutes.
Maximum working hours
Employees in Singapore are not permitted to work more than 12 hours per day except in very limited circumstances such as essential work in the community or national defense.
If an employer requires an employee to work more than 12 hours per day (up to 14 hours), the employer must apply for an overtime exemption to the authority.
Whether the employee is expected to work five or six days each week, the maximum number of hours they should work is generally an average of 44 hours per week.
What is the overtime rate in Singapore?
The overtime rate in Singapore is a minimum of 1.5 times the employee’s basic hourly rate of pay. An employer must pay the employee for overtime work within 14 days of the last day of the salary period. The entitlement of overtime pay for workman and non-workman is different.
The maximum amount of overtime an employee can work during any given month is 72 hours. However, if required, the employer can apply for an exemption from the Ministry of Manpower (MOM).
Work performed on rest days or during public holidays does not count toward the 72-hour overtime limit, except for work performed on those days beyond the employee’s usual daily working hours.
How do probation periods work in Singapore?
There is no mandated probation period for employees in Singapore. However, employers often designate a probation period lasting from three to six months.
What discrimination practices does Singapore provide for workers?
Singapore’s employment law does not currently contain any specific legislation that regulates workplace discrimination.
MOM intends to codify the Tripartite Guidelines on Fair Employment Practices (TAFEP Guidelines) into law. Until then, MOM refers employers to follow the principles of fair employment and the recommended best practices contained within the TAFEP Guidelines.
According to the TAFEP Guidelines, the five principles listed below comprise fair employment practices:
Recruit based on merit, regardless of age, gender, race, religion, marital status, family responsibilities, or disability.
Respect employees and treat them fairly and respectfully.
Provide fair opportunities to receive training and development based on their needs and strengths.
Reward fairly based on ability, contribution, experience, and job performance.
Comply with labor laws.
Can employees in Singapore join unions?
Employees can join trade unions in Singapore. In fact, according to MOM, employers cannot prevent their workers from joining a union.
The Trade Unions Act and its Regulations govern trade unions in Singapore. This legislation regulates trade union activities such as the safe custody of union funds, the free election of union officers, and the proper management of union affairs. The Trade Disputes Act covers industrial action and lock-outs.
Part III of the Criminal Law (Temporary Provisions) Act provides temporary provisions to prevent strikes and lock-outs in sectors composed of essential services. The Singapore Labor Foundation Act is intended to improve the welfare of trade union members and their families and to continue the development of Singapore’s trade union movement.
Are there collective bargaining agreements in Singapore?
Collective bargaining agreements exist in Singapore under the Industrial Relations Act.
Can companies drug test employees in Singapore?
Singapore's law does not provide specific provisions preventing an employer from testing their job applicants or current employees for drugs or other substances.
What is the relevant workers’ compensation legislation in Singapore?
The Work Injury Compensation Act (WICA) provides employees with the ability to enter claims for work-related injuries or illnesses without the necessity of taking legal action. MOM requires employers to buy work injury compensation insurance for all local or foreign employees who:
Perform manual work, regardless of their salary level
Perform non-manual work and earn a base salary of S$2,600 or less
Failure to provide this insurance could result in a fine of up to S$10,000, imprisonment for up to 12 months, or both.
For other employees, employers can decide whether to obtain insurance, but if such an employee makes a valid claim, you must compensate them regardless of insurance.
WICA does not cover:
Domestic workers
Uniformed personnel
Independent contractors and the self-employed
Managing employee offboarding in Singapore
Offboarding an employee can be a minefield fraught with potential missteps. If your company plans to hire workers in Singapore , you must understand the country’s regulations surrounding the termination and offboarding of an employee. In Singapore, either the employer or the employee can terminate a contract of service.
Here, we will discuss the common termination scenarios in Singapore.
Termination with notice
The party initiating the termination must provide the other party with a termination letter in writing. It is best practice to request that the other party sign the letter to acknowledge their receipt of the document.
As the employer, you are not required to give a reason for termination as long as you give the employee due notice. If the employee wishes to know the reason for their termination, they can speak with management or the company’s HR team.
The length of the required notice period should be stipulated within the contract of service between the employer and employee. This period should be the same length for both parties.
If the contract of service does not specify the length of the notice period, the required length of the notice period depends on the employee’s duration of service, as follows:
Less than 26 weeks = one day’s notice
26 weeks to less than two years = one week’s notice
Two years to less than five years = two weeks’ notice
Five years or more = four weeks’ notice
If both parties consent, they may agree in writing to waive the notice period.
Termination without notice
If either party terminates a contract of service without observing the required notice period, they must pay the other party in lieu of notice. This payment is the monetary equivalent of the salary the employee would have earned by working during the required notice period.
Termination without notice due to breach of employment terms
If either party breaches the terms of the contract of service, the other party may terminate employment without notice. In this instance, the party who breached the terms must pay compensation in lieu of notice, as described above.
The following are scenarios that are considered breaches of employment terms:
If the employer fails to pay the employee’s salary within seven days of the salary being due, the employer breaches the contract.
If the employee is continuously absent from work for more than two working days without approval and good reason, the employee breaches the contract.
If the employee is continuously absent from work for more than two days without informing or attempting to inform the employer of the reason, the employee breaches the contract.
Termination without notice due to employee misconduct
As the employer, you must conduct a formal inquiry before taking any disciplinary action against an employee, including termination due to misconduct.
Misconduct can include actions such as:
Dishonesty
Theft
Disorderly or immoral conduct at work
Insubordination
When conducting an inquiry, it is best practice to follow these steps:
Tell the employee about their alleged misconduct.
Allow the employee the opportunity to present their case.
The person hearing the case should not be in a position that would imply bias.
You may suspend the employee for no more than one week. A longer period requires the Commissioner for Labor’s approval. During suspension, you must pay the employee at least half of their regular salary.
If the inquiry establishes the employee’s misconduct, the employer may take one of the following actions:
Immediately demote the employee
Immediately suspend the employee for up to one week without pay
Terminate the employee without notice and without salary in lieu of notice
If an employee feels their employer wrongfully terminated them, they may file a wrongful dismissal claim with the Tripartite Alliance for Dispute Management (TADM) within the stipulated time.
Are terminated employees in Singapore entitled to severance pay?
Severance pay is not covered by Singaporean employment laws. However, termination payments (in addition to payment in lieu of notice) can be stipulated within the contract of service.
Disputes arising about termination payments can be settled in the tribunals or civil court.
Differences between employees and contractors in Singapore
Regardless of the country where you employ workers, it is paramount that you do not misclassify employees as independent contractors and vice versa. Here, we will discuss these concerns specifically as they apply to Singapore.
What regulations separate employees and contractors in Singapore?
An employee is someone who enters into a contract of service with an employer.
An independent contractor, such as a vendor or self-employed individual, is someone who enters into a contract for service with a company. This contract allows the company to engage the contractor for a fee to perform specific work or complete a particular project or assignment.
The Employment Act only applies to certain types of employees, as discussed earlier in this article. It does not apply to independent contractors.
What are the relevant rules on contract workers in Singapore?
There is no all-encompassing test to identify a contract of service from a contract for service. In general, the features of each include:
Contract of service
Establishes an employer-employee relationship
Employee performs work for the employer
May be covered by the Employment Act
Includes the terms of employment, including working hours, benefits, etc.
Contract for service
Establishes a client-contractor relationship
Contractors perform work on their own behalf
Not covered by the Employment Act
Not eligible for statutory benefits
Differentiating a contract of service from a contract for service
According to MOM, you must consider several factors when distinguishing the two contract types, including:
Control
Who is responsible for the recruitment and dismissal of employees?
Who pays employees’ salaries and how?
Who is responsible for the process, method, and timing of production?
Who is responsible for providing work?
Ownership of factors of production
Who provides the equipment and tools?
Who provides the materials and location of the work?
Economic considerations
Is the work performed on behalf of the person or the employer?
Can the person share in profit or be liable for loss?
How are earnings calculated and profits derived?
Can employers hire employees on fixed-term contracts in Singapore?
You may hire employees on fixed-term contracts in Singapore. The contract of service for such an employee indicates that the employment relationship will terminate upon the expiry of the designated term unless renewed.
What are the misclassification laws and penalties in Singapore?
Several potential fines and penalties may apply to an employer who misclassifies an employee as an independent contractor. Administrative penalties include the public release of their company name and information. Certain tax liabilities that employers can face are as follows.
Fines of up to S$5,000 if misclassification caused the employer’s failure to comply with tax obligations.
Penalties of up to 400% of any taxes that were undercharged as a result of misclassification.
Fines of up to S$50,000 if misclassification led to the filing of incorrect tax returns.
Payment of a surcharge of 50% of any necessary tax adjustment due to misclassification.
For failing to make the required Central Provident Fund contributions, the employer may be liable for fines ranging from S$1,000 to S$10,000. If the employer fails to pay the employee’s statutory benefits as a result of misclassification, they may be fined and/or imprisoned.
One of the easiest ways to avoid the consequences of misclassification in Singapore is to work with an employer of record who can mitigate the risks for you. Remote’s team of employment experts specializes in local laws and can help you classify your workers correctly and comply with labor rules in Singapore.
The fast, simple, compliant way to hire in Singapore
Labor law in Singapore may make hiring workers in the country seem complicated. However, working with an employer of record like Remote can vastly simplify hiring and paying employees in Singapore , and all over the world.
Remote has localized expertise in every aspect of international hiring including, onboarding, taxes, benefits, and payroll. Plus, Remote's platform is built to maximize compliance with all state and federal legislation in every nation we support.
Remote is a top-rated global employment partner, ranking number one in the G2’s Spring Report 2023 under Multi-Country Payroll, Contractor Management, and Contractor Payments categories.
Remote’s experience, infrastructure, and expertise make international expansion into Singapore easy! Learn more about our world-class employer of record services. You can also use Remote’s free Employee Cost Calculator tool to help you calculate the cost of hiring an employee in Singapore or any other country.
