Firms Must Notify MOM Regarding Cost-saving Plans that Affect Employee’s Salary

March 12, 20203:49 pm1144 views
Firms Must Notify MOM Regarding Cost-saving Plans that Affect Employee’s Salary
Firms Must Notify MOM Regarding Cost-saving Plans that Affect Employee's Salary

Employers will be required to notify the Ministry of Manpower (MOM) if they introduce any cost-saving measures that affect employees’ monthly salaries.

“This is to encourage a sense of social responsibility and prevent downstream salary disputes,” Manpower Minister Josephine Teo said in a speech at the Singapore Business Federation on Wednesday (Mar 11).

“The notifications will also allow MOM to monitor the scope and scale of such measures, and whether more government interventions are needed,” she added.

The new rule takes effect from Thursday and applies to employers with 10 or more workers. It is intended to be a temporary measure until the economy recovers, MOM said in a separate press release, Channel News Asia reports.

Those that fail to inform MOM of their cost-saving measures will be investigated and action will be taken. The requirement is part of the latest update to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment. 

The revised guidelines include suggestions on how companies can handle spare manpower capacity, such as implementing flexible work schedules or redeploying their workers to other departments within the company.

Flexible work schedules are such that employers reduce the workers’ working hours, creating a “time bank” of unused working hours that can be used to offset the increase in working hours in subsequent periods. 

Employers should agree on the salary rate of the accrued hours with their employees, MOM said. Those who want to implement flexible work schedules have to apply to the Commissioner for Labour after seeking approval from employees and unions.

“Simply put, they are paid now for work later,” Mrs Teo said. “At some point in future, when overtime is required, the employer can then withdraw the extra hours based on an agreed formula.”

Read also: MOM to Raise Qualifying Salary for Foreign Workers to Protect Locals