Business expansion into Singapore allows companies to access new markets, form strategic partnerships, and grow revenue. However, companies must attract top talent and maintain a motivated workforce to succeed abroad. This can be done best by offering the right employee benefits in Singapore.
Many employers are happy to offer employees additional compensation, such as medical care, paid leaves, and retirement benefits. Here, we take you through mandatory and extra employee benefits in Singapore so you can plan your expansion. We also explore how companies can profit from outsourcing such responsibilities to a Singapore-based Employer of Record.
Understanding the Importance of Employee Benefits
Offering a robust benefits package to employees in Singapore allows companies to attract a skillful and talented workforce. This is because job seekers usually prioritize employment benefits when choosing job opportunities.
Also, such benefits promote employee satisfaction and are crucial for talent retention and maintaining high morale among employees.
Similarly, employee benefits like paid annual leave give employees time off, thus promoting work-life balance, employee well-being, and productivity.
Furthermore, labor laws in Singapore demand employers offer certain employee benefits to avoid fines or penalties due to noncompliance.
The government is extremely serious about noncompliance with the Labor Act and relevant employee benefits in Singapore. Fines or criminal charges for companies can penalize those who do not do their duty.
For example, in 2016, a marketing company in Singapore was ordered to pay fines equal to 20% of the amount it should have paid in workplace injury compensation payments. This was on top of repaying all missing amounts.
Mandatory Employee Benefits in Singapore
The following are mandatory employee benefits in Singapore:
- Retirement benefit
- Medical care benefit
- Work-injury and disability benefit
- Maternity benefit
Retirement Benefits in Singapore
The Central Provident Fund (CPF) is responsible for providing retirement benefits to employees in Singapore. The CPF helps individuals build retirement savings and meet their housing, healthcare, and education needs.
Singapore’s retirement age as of July 2022 is 63, but this age will increase progressively to 65 by 2030. However, employees can access their retirement fund after they are 55.
Medical Care Benefits in Singapore
In Singapore, healthcare benefits are provided through the Central Provident Fund (CPF) system. The CPF accounts have specific sub-accounts for healthcare, known as the Medisave account. The Medisave account helps individuals save for their medical needs, including hospital visits, outpatient treatments, and other medical expenses.
Work-Injury and Disability Benefits in Singapore
In Singapore, the Work Injury Compensation Act (WICA) and the Employees’ Compensation Act (ECA) are legislations that protect employees who suffer from work-related injuries or disabilities.
Employers are required to purchase work injury insurance for employees under the WICA scheme. These insurance premiums contribute to the compensation payouts for employees who suffer work-related injuries or diseases.
The Employment Claims Act (ECA) allows employees, including disabled employees, to resolve employment-related disputes.
Maternity Benefits in Singapore
Female employees have the option of 16 weeks of Government-Paid Maternity Leave (GPML) for children who are citizens of Singapore. Foreign residents are can take 12 weeks of maternity leave.
Working fathers are entitled to Government-Paid Paternity Leave (GPPL) of 2 weeks. However, it’s expected that this will be doubled for children born in 2024.
While Singapore does not have mandated paid parental leave, employees are allowed to request 6 days of unpaid leave for parental care each year. Like with paternity leave, this unpaid option will double in 2024.
Singapore doesn’t have a minimum wage across the board, however, thresholds do apply in certain situations. Some jobs, such as food-service workers, cleaners, or security, include a minimum wage threshold. Generally, these are low-level jobs without the option for commissions or extra income.
At the same time, foreign companies or local companies hiring foreign workers must meet salary thresholds to apply for visas.
The government of Singapore is keen to strictly control companies applying for working visas. They are serious about preventing companies from simply falsifying or not correctly describing salaries in order to benefit from the required visa system.
One company notably found this out in 2020 when it received the equivalent of $52,000 in fines due to falsifying salaries for visa purposes.
Common Types of Extra Employee Benefits Programs
Unemployment Benefits in Singapore
There is no provision for unemployment insurance benefits in Singapore. Also, Singapore does not have any legislation mandating severance pay. However, it is still standard practice to compensate employees when dismissing them. Usually, this pay is 2 weeks to 1 month of wages per year of employment.
Employers can entice and retain employees by supplementing the health insurance provisions. This extra health insurance can help employees pay for additional medical care such as emergency room visits, hospital stays, and outpatient surgery.
Vacation and Leave Policies
Employees in Singapore are eligible for paid leave on the country’s 11 nationally recognized holidays. Similarly, employees can take yearly vacation based on the number of years they have served the organization, as described below:
- 7 days leave for 1 year of employment
- 8 days leave for 2 year of employment
- 9 days leave for 3 year of employment
- 10 days leave for 4 year of employment
- 11 days leave for 5 year of employment
- 12 days leave for 6 year of employment
- 13 days leave for 7 year of employment
- 14 days leave for 8 year of employment
It is common practice for employers in Singapore to reward their workers through bonuses. While these bonuses are not legally required, employers can issue them if they don’t fall below the minimum lawful standards.
Incentives such as cash bonuses, gift cards, or other non-monetary rewards help to motivate employee engagement with key goals, boost employee retention, and improve employee morale.
Innovative Perks and New Employee Benefit Trends in Singapore
Some employers in Singapore incorporate these trendy employee benefits in their overall employee welfare package:
– Remote work support
Companies in Singapore are embracing flexible remote work arrangements to improve work-life balance and boost employee satisfaction. Hence, providing remote work options, even for part of the week, is becoming a sought-after benefit in Singapore.
– Growth and development opportunities
Investing in employees’ professional growth and development is a relevant trend in Singapore. Training programs, skill-building workshops, and mentorship opportunities allow employers to demonstrate a commitment to employees’ career advancement and foster loyalty.
– Financial wellness
More businesses in Singapore are supporting employees’ financial well-being by providing access to financial planning resources, assistance with budgeting, and retirement planning services.
Employee Benefits in Singapore: Staying Competitive in 2023
Employee benefits in Singapore are a mix of mandatory and other offerings provided by employers. However, the cost of offering competitive employee benefits in Singapore is rising, putting many employers at risk of being unable to attract the best talent.
More and more potential employees in Singapore want employee benefits packages that companies are unable or unwilling to provide, such as more flexible work patterns or better retirement plans beyond those required by law. In order to provide these, companies will have to decide on what they accept within their budget or find new ways to offer better plans, such as through group deals offered by third parties.
The government of Singapore emphasizes personal responsibility for retirement and healthcare through the CPF. Still, employers complement the mandatory benefits with additional perks to attract and retain talent. As a result, the country’s employee benefits landscape is diverse, dynamic, and competitive.