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Employment in Singapore

Singapore employment law appears complex and confusing when looking from an outside view although in some ways there are many similarities to other countries. Both Singapore nationals and foreign workers are subject to Singapore employment law, but there are differences in certain benefits required for each. For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Singapore.

Key points on employment in Singapore

There are several key areas to be aware of within Singapore’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the Singapore laws and rules for both Singapore employees as well as foreign nationals.

In Singapore, it is reportedly known for foreign talent being very welcome and immigration laws as the least restrictive in the world. This section applies to all employees who are covered under the Employment Act. The official site for employment law in Singapore is the Ministry of Manpower (MOM).

Employee Entitlements

Information Explanation
Medical Leave ?

The number of days of paid sick leave a new employee is entitled to depend on his service period.

E.g. employed for 3 months, 5 days paid outpatient leave / 15 days paid hospitalization

Employment Termination

Information Explanation
Severance / Redundancy Pay ?

Additional compensation for terminating an employment contract early is purely a contractual term and not governed by the Singapore Employment Act. In the event of disputes it would need to be heard at the civil court.

Termination of Employment ?

The party who intends to terminate the contract must give notice to the other party in writing, or payment in lieu of notice.

The notice period normally is based on what is agreed in the employment contract. If no period was agreed upon, the following periods apply.

Length of Service Notice Period
Less than 26 weeks 1 day
26 weeks to less than 2 years 1 week
2 years to less than 5 years 2 weeks
5 years and above 4 weeks

 

Notice can be waived by mutual consent. An employer may also terminate an employment relationship without notice if the employee breaches the employment contract, performs gross misconduct or is absent from work continuously for more than two working days, without approval or good reason.

Outsourcing Employment Through a GEO Employer of Record Service

Companies entering Singapore can make a decision whether to use their own resources or to use a Global Employment Organization to handle employment and payroll responsibilities. A GEO solution is particularly beneficial when a company is looking to setup an office quickly with a manageable cost. The complexity of employment regulations in Singapore makes the use of a GEO advisable to ensure full compliance with employment laws, including the drafting of local employment contracts for workers.

The company that is expanding into Singapore contracts with the GEO to employ and payroll their staff on their behalf. The GEO then assumes the legal responsibility for these employees, sponsoring them on work permits if necessary, complying with local employment law and running their monthly payroll. This is especially useful to fulfill all of the specific withholding requirements for pensions and benefits, as well as documenting termination, probation periods and leave requests.

Singapore

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