GUIDE TO HIRING EMPLOYEES IN SINGAPORE

Employees, be it the full-time staff or part-timer, are the most important resource for any company. Whether you are a local incorporated company or a foreign company, you need to hire employees to help you to manage the registered company and run the business.

KEY CONSIDERATIONS IN THE HIRING PROCESS

Once you have made up your mind that you need to employ somebody to work for you, the next few considerations are likely to be :

  • What types of employees do you need in your company? Are they part-timer, full-time staff or contract worker?
  • What are the labour laws in Singapore?
  • Are there any additional visa requirements for foreign employees?
  • What are the requirements for terminating an employment contract?

What are the labour laws that are applicable to the employees?

In Singapore, two main legislation regulate the working laws:

  • Employment Act (EA) for both local and foreign employees
  • Employment of Foreign Manpower Act (EFMA) which is applicable to work pass employees

All employees, be it foreign or local, working under a contract of service are covered by the Employment Act except the following:

    • Manager or executive with monthly basic salary of more than $4,500
      • A person who has direct authority or influence in making employment decisions that include hiring, firing, promotion, transfer and discipline of other employees.
      • A person who involves in the operation and management of a business.
      • Professionals e.g. lawyers, accountants, doctors, or persons with specialised skill sets.
      • Seafarer
      • Domestic helper
      • Statutory board employee or civil servant

What is Employment Agreement in Singapore?

In Singapore, the relationship between employers and employees is regulated by contracts. This employment contract may alternatively be named an offer letter, terms of engagement, appointment letter or employment agreement. Although this agreement can come in the form of writing, verbal, express or implied, a written agreement is highly recommended where it will spell out the terms of employment and minimise potential arguments and disputes of the terms and conditions whenever possible.

The employment agreement of an employee covered by the Employment Act cannot contain any terms less favourable than what is stipulated in the Employment Act. Such these terms will be considered void and illegal if they are present in the employment agreement.

Guide to Hiring Employees in Singapore

What are the Essential Terms in Employment Agreement?

Company Compliance Requirement
      • Commencement date of employment
      • Appointment: job title and job scope
      • Duration of employment contract, if applicable
      • Remuneration package
      • Hours of work
      • Employee benefits
      • Probation period, if applicable
      • Code of conduct
      • Termination

New Requirements in Employment Act after April 2016

In addition to having an existing employment agreement, employers in Singapore must include the following in relation to employees covered by the Employment Act :

      • Issue itemised pay slips
        • In the form of soft copy, hard copy or handwritten and it has to be issued within three working days of payment
        • The itemised pay slip must contain:
      • Employer’s full name
      • Employee’s full name
      • Date of payment (or dates when a consolidated pay slip is issued)
      • Basic salary which includes the rate and hours worked
      • Any allowances e.g. uniform, food and transport
      • Any additional payments e.g. bonuses, public holiday pay, rest day pay
      • Any deductions e.g. CPF contributions, no pay leave, absence from work
      • Overtime hours worked and overtime pay
      • Start and end date of overtime work
      • Total net salary
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        • Issue Key employment terms (KET) together with a contract of service (these must be issued within 14 days from the start of employment and will include items such as leave policy, medical benefits and other relevant terms)
      • Keep employment records that include employee records and salary records (in the form of soft copy, hard copy or handwritten)

Hiring Foreign Employees

The Employment of Foreign Manpower Act (EFMA) is the governing body that regulates the employment of foreign workers. Under the Singaporean Employment Act, a foreigner needs a valid work visa in order to work in Singapore. If you wanted to employ a foreigner, you must apply for a valid work pass or work permit on his/her behalf before his or her employment commences.

The foreign work force can be categorised into four main types :

      • Skilled professionals

Professionals like software engineers, doctors, R&D specialists and so on will be issued an Employment Pass.

      • Semi-skilled professionals

Professionals like technicians, chefs, administrative professionals will need the S Pass.

      • Unskilled Professionals

Construction workers, domestic helpers will be issued a work permit, also known as R Pass, for them to start working in Singapore.

      • Foreign Entrepreneurs

EntrePass is the work pass that applies to foreign entrepreneurs who want to operate and start businesses in Singapore.

General Guidelines of Recruitment

In the effort to ensure fair employment practices, the Ministry of Manpower has issued certain guidelines on fair HR practices especially in issues related to hiring process.

      • The system of meritocracy is the determining factor while selecting and recruiting candidates for employment.
      • The selection criteria must be related to job requirements and have to be made known to all job applicants.
      • Skills, experience, and ability to perform the job weight the hiring decision but not the age, race, gender, religion, family status or disability to avoid discriminatory practices.
      • Attributes that include age, gender, marital status, race, religion and language, should be avoided in job postings.
      • The marital status, family responsibilities, and religion are not the acceptable criteria to be used for employment selection.
      • Personal data obtained from the job application form is strictly for administrative purposes only.