National Wages Council recommends S$50-S$65 increment for low-wage workers

June 1, 201610:21 am516 views
National Wages Council recommends S$50-S$65 increment for low-wage workers
A cleaner in Singapore. (File photo: Xabryna Kek)

SINGAPORE: The National Wages Council (NWC) has recommended a monthly wage increment of S$50 to S$65 for workers earning a basic salary of up to S$1,100, a move away from its past recommendations of a fixed quantum figure.

Announcing the annual wage guidelines at a press briefing held at the Ministry of Manpower headquarters on Tuesday (May 31), NWC chairman Peter Seah said the change is to accommodate each company’s performance, adding that the range is not meant to put a cap on the wage increment at S$65.

“(The range) is to take into account affordability. There is also a very strong call that employers should reward their workers if they are doing well,” said Mr Seah.

For the past three years, the council recommended a minimum pay hike of S$60 for workers. In 2012, the council recommended a monthly increment of S$50.

“Even in previous years when we used S$60, there were employers who gave more than S$60 to their low-wage workers,” Mr Seah added.

UOB economist Francis Tan said the recommendation of having a wage range will allow companies to have flexible wage practices.

“It’s very important for the range of the wage increment to be suggested because currently, the economy is growing at a very slow rate. Some companies may not be doing that well so certainly they can afford the lower range,” Mr Tan added.

Over the year, the proportion of full-time employed resident employees earning a basic salary of up to S$1,100 is estimated to have decreased from 8.2 per cent in 2014 to 6.9 per cent in 2015, said NWC.

As of December 2015, 46 per cent of private establishments gave or intended to give some form of wage increases to their employees earning a monthly basic salary of up to S$1,100. Of these, 18 per cent gave increments equal to or more than the NWC’s recommended built-in wage increase of S$60.

This was in contrast to the 31 per cent which gave increments equal to or more than the NWC’s recommended built-in wage increase of S$60 to employees earning a monthly basic salary of up to S$1,000 in 2014.

For low-wage workers earning above S$1,100, NWC recommended that this group be given an equitable and reasonable wage increase. In addition, they could be given a one-off lump sum based on skills and productivity.

As the NWC noted that many low-wage workers are employed in outsourced work, it urged employers and service buyers to incorporate NWC wage guidelines into outsourced service contracts in sectors such as cleaning, security and landscaping services.

Annual wage adjustments and the Annual Wage Supplement (AWS) should also be factored into the workers’ new contracts.

“We are concerned that when the contracts are being renewed, or when (they are) being offered, in some cases we understand that the prices may actually be reduced,” said National Trades Union Congress’ (NTUC) assistant secretary-general, Cham Hui Fong, at the press conference.

“AWS is probably the only bonuses that a lot of the outsourced workers get and this is certainly of importance to them,” Ms Cham added.

The Singapore National Employers Federation and NTUC supported the guidelines. The Government has also accepted the council’s recommendations.

GOVERNMENT TO “LEAD BY EXAMPLE” AS EMPLOYER, SERVICE BUYER

In accepting the recommendations, the Government said it recognised that buyers of outsourced services will need to play a part for the recommendations to be effective, and it will continue to “lead by example” as both an employer and service buyer.

It will continue to reference the NWC guidelines in its annual wage adjustment exercise and “strongly encourage” service suppliers to the public sector to adopt NWC recommendations on wage increments for their workers, it said in a press release on Tuesday.

In a Facebook post, labour chief Chan Chun Sing said the challenge going forward is convincing and mobilising more employers to push for productivity-driven growth and skills development as key strategies to sustainable broad-based real wage increases for all workers.

“Businesses need to transform through restructuring, innovation and productivity initiatives in tandem with training and reskilling of workers so as to prepare them for the industries and jobs of the future,” Mr Chan added.

Other NWC recommendations include encouraging employers which have done well to reward their workers with built-in wage increases and variable payments commensurate with the firms’ performance.

Employers which have not done well and face uncertain prospects may exercise wage restraint, with management leading by example.

The guidelines will take effect from Jul 1.

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