Central Provident Fund contributions
Increase in saving scheme rates: The Central Provident Fund (“CPF”) is a compulsory employment based savings scheme that funds retirement, healthcare, and housing needs. From January 1, 2016, employers’ CPF contribution rates for employees aged between 50-65 years will be increased by between 0.2 to 2 percentage points. In addition, the salary ceiling on which CPF contributions are payable will be raised from S$5,000 to S$6,000.
Action required: HR and payroll department ought to be aware of the applicable revised contribution rates payable for such employees.
Itemised payslips for employees: From April 1, 2016, employers must provide itemised payslips to employees who are covered by the Singapore Employment Act (“EA Employees”). The payslips must contain certain prescribed information, and they must be sent at least once a month. Employers must keep a record of the issued payslips for at least two years. There are no prescribed formats which the itemised payslip must adopt.
Action required: HR and payroll should review their payslip forms to ensure they contain the prescribed information.
Requirement to provide written key employment terms: As of April 1, 2016, employers are required to give EA Employees their key employment terms (“KETs”) in writing within 14 days of their employment start date. If the hire is not intended to last beyond 14 days, there is no obligation. There are no prescribed formats which the written KETs must adopt.
Action required: HR should review their employment contracts to ensure that they contain the necessary information.
Requirement to maintain detailed records: From April 1, 2016 employers must maintain detailed employment records for their current and departing EA Employees. The records must contain certain prescribed information.
Action required: HR should review internal management policies to make sure the required information is obtained and stored for the required period.
Breaches of the Employment Act
New framework for legal breaches: A new framework will be introduced on April 1, 2016, which will treat less serious breaches of the Employment Act as civil breaches. This means that these types of breach will instead attract administrative penalties, rather than being criminal offences.
Examples of the types of breach included include: (a) failing to issue itemised payslips; (b) failing to issue KETs in writing; (c) failing to maintain detailed employment records; and (d) accidentally providing inaccurate information to the Commissioner for Labour or to the inspecting officers.
Action required: Employers should take appropriate steps to ensure compliance with the EA requirements. While the new EA requirements are to take effect on April 1, 2016, the Singapore Ministry of Manpower has announced a one-year grace period during which they will adopt a light touch enforcement approach.