Singapore is a favorable business location for overseas investors as it provides low tax rates and a skilled workforce. This makes it an attractive location from investors who want to expand globally and are looking for hiring employees in Singapore.
However, Singapore has a very firm legal framework for protecting the rights of employees and that is the reason there are a lot of employment laws that an employer should abide by. All local employees are protected by the Employment Act (EA), which outlines all the responsibilities employers have for their employees. All foreign employees are covered by the Employment of Foreign Manpower Act (EFMA).
All the employment laws are governed by the three bodies; which are the Ministry of Manpower (MoM), the National Trades Union Congress (NTUC), and Singapore National Employers Federation (SNEF).
Labor Laws in Singapore
Types of contracts
Following are the terms in which an individual can be hired:
1. Full-time
2. Part-time
3. Temporary
4. Contract
It depends upon the terms with the employee how an individual can be paid on hourly or monthly basis
Working hours in the Singapore
The working hours are as per the hours agreed to by the employer and employer in the service contract. Below are working hours for common work arrangements
· For 5 days or less per week- contractual hours of work are 9 hours per day or 44 hours per week;
· More than 5 days’ week: contractual hours of work are 8 hours per day or 44 hours per week.
Minimum Wages
Unlike many other highly developed countries, Singapore is one of the few countries in the world that does not have a minimum wage requirement for expats and local workers. This makes the country one of the most attractive countries globally.
Probation period
The duration of the probation period of employees in Singapore can range from 3-6 months. On successful completion of the probationary period an employee is treated as permanent employee of the organization.
Termination Regulations
Dismissal or Termination by Employer:
If an employee is terminated by an employer on the basis of misconduct, then the salary should be paid on the last day of employment or within three working days of the termination.
Notice Period
In case of no notice period mentioned in the contract, then the employer must adhere to the notice period regulations that are outlined in the Employment Act as below:
· One day for employees who have served less than two weeks
· One week for employees who have served for 26 weeks to two years
· Two weeks for employees who have served for two to five years
· Four weeks for employees who have served for more than five years
Termination by Employee:
If the employee wants to resign and serve the notice period, salary must be paid on the last day of employment.
On Termination of the contract without the notice then salary payment must be paid within seven working days of the last day of employment.
It is very risky for employers to terminate the employees therefore; it should be handled with utmost care. Taking the assistance of an established and experienced EOR solutions company in Singapore, such as NNRoad, would be really helpful with issues such as employee termination.
Types of Visas in Singapore
It is necessary for all the expats to mandatorily follow proper visa rules according to the immigration laws of Singapore. Below listed are some major types of work visas:
· Employment Pass: Employees in Singapore earning SGD 3300 or more on a monthly basis are required to have an employment pass. The visa is sponsored by the employer and is valid for 2 years and renewable for three years.
· Entrepreneur Pass: This is for business people who are looking to start a new business in Singapore. The company should be private limited and a capital of SGD 50000 or more is required.
· Personalized Employment Pass: This is for expat or Employment Pass holders earning higher income. SGD 18000 or more for expat professionals or SGD 12000 per month for employees with existing Employment Pass holders. This is a non-renewable visa with a validity of three years.
· S-Pass: This is for staff at mid-level. An employer registered in Singapore can sponsor it. No employer can have more than 20% of its workforce with an S-Pass. This is a renewable pass with a validity of 2 years. Employees earning SGD 2200 or more monthly are eligible for this pass.
Responsibilities as an employer for hiring employees in Singapore
Processing of Payroll in Singapore requires labor laws to be followed and should take into account the below points:
· Taxes: Employers are not required to withhold taxes from any of the employee’s monthly payroll tax deductions.
· Social Security: Both the employers and employee’s shares of CPF contributions must be paid by the employer.
· Minimum Wages: Although Singapore follows no minimum wage legislation in Singapore still all the expat employees with work passes should receive wages which corresponds to the immigration documents.
· Frequency of payment: All employees in Singapore must be paid on a monthly basis within seven days before the pay period ends.
· Payslips: Employees need to be provided with a detailed itemized payslip including the mandatory fields on or within 3 days of salary payment
- Data Retention: Employers are required to maintain All the mandatory employee data/documents should be maintained by the employer for seven years in either hard or soft copy.
Hiring Employees in Singapore
Hiring employees in Singapore can be difficult for any company that does not have a legal entity. It is important to be well aware of all the local employment regulations in Singapore for hiring employees in Singapore. One of the most affordable and compliant solutions is to use the Employer of Record (EoR) service that takes care of all the hiring formalities for your organization and simplifies the whole process of employee on-boarding without the need for you to establish any legal entity in Singapore. An EOR not only handles all the human resources operations but also becomes the legal employer of your employees; thereby, taking all the liability load from your shoulders.
Benefits of Using an Employer of Record in Singapore
Affordability – Using EOR is the easiest, flexible and the most cost-effective way to enter and expand in the Singapore market. There is no requirement of establishing a separate business entity which cuts off the cost and saves s lot of money for the business.
Flexibility – EoR allows you to scale your business up and down. It gives you the time and resources to focus on the revenue generating activities for your business while all the payroll and HR services are handled by the EoRs’.
Compliance – All the employees are on-boarded in compliance with the local labor laws for Singapore
Risk Management – Since EoR is the legal employer and therefore, all the legal liabilities are absorbed by the EoR. This frees you from all the risks associated with the local regulations and you can focus on the daily business activities.
Conclusion
Companies can speed up the hiring and on-boarding process in Singapore with the help of an expert EoR service provider such as NNRoad without the need of any legal entity setup. NNRoad has the necessary expertise and experience to help assist you in growing your business in Singapore. This is one of the most cost effective and preferred way to business expansion as it will save all your time and resources to help focus on the daily activities.
