MOM has no plans to revise annual leave entitlements, employers should consider impact on business costs

MOM has no plans to revise annual leave entitlements for now

At present, the Singapore government does not have any plans to revise the annual leave entitlements for employees.

Crucially, increasing annual leave may result in companies having to bear the brunt of higher business costs.

Senior Minister of State for Manpower Koh Poh Koon laid out the government’s decision during yesterday’s (3 April) Parliamentary Sitting.

He also suggested that employee productivity can be enhanced by other methods other than providing more annual leave.

Annual leave entitlements increase for every year of service with the same employer

Mr Koh highlighted that in accordance with the Employment Act, employees are entitled to at least seven days of annual leave.

Their leaves, however, increase by one day for every successive year that they work for the same employer.

In 2022, 64.6% of full-time resident employees aged 25 to 64 were entitled to at least 15 days of annual leave.

This figure was higher compared to 61.1% in 2018.

Employers should adopt more holistic approach to employment benefits

Mr Koh stressed that annual leave entitlements should be considered alongside other support measures for employees.

“These include paid public holidays, sick leave and parental leave,” he said.

Reviews of leave entitlements should also factor in the impact on business costs.

While there is currently no intent to review annual leave entitlements, employers are urged to assess employment benefits “holistically”.

This is so that employers can attract and retain talent in a tight labour market.

Other methods like work-from-home arrangements can improve employee productivity

During the sitting, Member of Parliament (MP) Louis Ng contended that a more rested workforce would lead to higher productivity.

According to him, this could offset some of the aforementioned costs.

Addressing the topic of business costs, Mr Koh noted that if more people are going for more leaves, companies’ operations will require backfilling.

This will then require them to hire more people to “backfill” the persons on leave.

He then pointed out that increasing annual leave is not the only solution to boosting employee productivity.

Mr Koh proposed other viable methods such as improved training, redesigning of jobs, and better equipment for those who undertake manual tasks.

Moreover, leveraging flexible work arrangements such as working from home can contribute to better work-life balance.

These measures will help “[equip] workers with better skills…to be a multiplier of productivity”.

Mr Ng also brought up the lower-income group of workers who may not be able to enjoy such arrangements. Assuaging him, Mr Koh remarked:

We will continue to look at how to best support our lower earning workers, including how we can make sure that they have a proper work-rest cycle.

Also read: 10 Employee Rights To Know Like Compulsory Paid Holidays & OT Pay Under Singapore’s Laws

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Featured image adapted from MCI Singapore on Youtube and Bloomberg.