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Singapore’s Employment Act Changes: Mandatory Itemised Payslips And Written Kets Issuances
From 1 April 2016, employers in Singapore will need to comply with changes to the Employment Act (EA) on providing their EA employees with written Key Employment Terms (KETs) and itemised payslips. Employers should understand the details of these mandatory issuances, review their employment records, and even keep more detailed employee records than previously required to mitigate the risk of administrative penalties resulting from non-compliance.
Introduced in 2013 by the Singapore Ministry of Manpower (MOM), the EA was amended on 17 August this year to protect the rights of both employers and employees. The amendment enables employees to better understand how their salary is calculated along with their employment terms and benefits as well as to help employers prevent misunderstandings and minimise disputes at the workplace.
According to the EA, employers will have to provide itemised payslips for all their employees at least once a month with the salary payment, or within three days of the salary payment at the latest. The KETs must be issued to employees who are hired after 1 April 2016 and who will be employed for a continuous period of 14 days or more. Employers must also maintain detailed employment records of their current employees as well as employees who have left employment after 1 April 2016.
The following are the five basic categories of KETs:
- Employment details such as employee particulars and place of work
- Working hours and rest days
- Salary, benefits, overtime payments
- All types of leave entitlement and medical benefits
- Others: Probation and termination notice.
While all breaches under the current EA are considered criminal breaches, the penalty framework will also be changed to treat less severe breaches under the EA as civil breaches.
The breaches will include the failure to issue itemised payslips, the failure to issue written KETs, the failure to maintain detailed employment records, and the provision of inaccurate information to the Commissioner of Labour or inspecting officers without the intent of defraud and mislead.
As itemised issuances were not mandatory in the previous round of amendments to the EA, companies may find it time-consuming or lack the assistance to comply with the new requirements. TMF Group in Singapore has the local knowledge to understand and adapt to new changes and labour regulations. We can also help companies with their payroll and human resources administrative duties and with the mitigation of risks in order to avoid penalties for failure, incorrect or late implementation of the regulatory changes.
Need more information? Get in touch with our experts in Singapore.