Employers No Longer Need To Inform MOM About Wage Cuts From 1 Aug
At the height of the Covid-19 pandemic, many Singaporeans unsurprisingly faced difficult financial conditions. As such, the Ministry of Manpower (MOM) implemented measures to protect local workers.
However, the easing of restrictions and current economic struggles means that new challenges have arisen in our country.
In response, MOM has decided to make a few changes to adapt to the altered environment. One of these changes is the removal of the rule requiring employers to notify MOM about wage cuts — this will take effect from 1 Aug.
Despite the updated protocol, MOM urged employers not to rely on such “cost-saving measures” as a way to deal with challenges.
Removal of need for employers to notify MOM about wage cuts
In a press release on Monday (18 Jul), the manpower ministry announced that employers will not be required to issue notifications about cost-saving measures that affect their employees’ monthly salaries.
MOM first introduced the rule in Mar 2020, requiring employers with more than 10 workers to notify the ministry should they implement any cost-saving policies that affect their employees’ salaries.
However, the number of employers submitting these notifications has decreased to a monthly average of just 8 in the first quarter of 2022.
At the start of the ‘Circuit Breaker’ in Apr 2020, it was at a peak of 1,713 employers.
In May 2020, MOM also issued an advisory on the “Retrenchment Benefit Payable to Retrenched Employees as a Result of Business Difficulties” due to Covid-19.
This allowed employers to have more flexibility in granting their retrenched employees benefit payments.
MOM shared that the number of such workers seeking assistance has since declined from 198 cases in Aug 2020 to just 8 in the first quarter of 2022.
The fall in numbers has caused MOM to review these requirements. They have thus decided to remove the advisory and the need for notification from 1 Aug.
Alongside this move, the National Wages Council urged employers not to reply on cost-saving measures to resolve challenges. Instead, they should take a long-term view of their business needs.
Employers who are struggling with an excess of manpower should refer to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment for guidance.
Improved handling of employee cases
MOM has also stated that there has been a fall in the number of employment claims and appeals.
Such reports apparently dropped from 2.59 per 1,000 employees in 2020 to 1.73 in 2021. The sharp decrease was apparently due to a decline in salary claims from both local and foreign employees.
For local employees, there was a drop in salary claims in the service sector, which saw “significant economic growth” in 2021.
As for foreign employees, there was also a significant decrease in salary claims from the construction sector. The cause for this was attributed to MOM’s measures in tackling non-payment of salaries over the past two years.
Source: Tom Bodley on Flickr
The Tripartite Alliance for Dispute Management (TADM) had also engaged employers to ensure about 24,000 workers receive their due salaries in 2021 before they lodged claims.
Similarly, more claimants have received their full salary after submitting their claims. 95% of employees in 2021 managed to recover their salary in full, compared to 92% in 2020.
MOM had also suspended the work pass privileges of an undisclosed number of employers that refused to fully repay their employees.
In addition, less than 1% of salary claims in 2021 involved employers unwilling to make full payment of salaries despite having enough financial means to do so.
A significant improvement in working conditions
Thankfully, MOM’s pandemic-era measures have been evidently successful in providing assistance for employees.
As the business climate and corresponding challenges change with time, so too does our focus on assisting our community.
Hopefully, employers will take this as a reminder to continue treating their workers appropriately and with respect.
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