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3 manpower policies Singapore SMEs should consider in 2016 - Itemised payslips, hiring foreign workers and innovating processes
Singapore's manpower landscape is changing in 2016, with changes in payslip and employment terms, foreign talent hiring requirements and new government schemes. Now's the time to prepare for policy adjustments and learn how you can benefit from a new small business scheme.
What's driving the changes? Singapore's tightening labour market is pushing the island state to restructure in order to strengthen the local workforce, boost productivity and reduce "reliance on manpower".
For Singapore's small to medium-sized enterprises (SMEs), the good news is all about the Ministry of Manpower's (MOM) new pilot Lean Enterprise Development (LED) scheme, which aims to support small businesses to innovate and become more productive.
At the same time, small business owners need to ensure compliance with the requirements of new manpower policies for hiring and paying workers. Here’s what you need to know to prepare:
Changes to payslips and new key employment terms
Starting 1 April 2016, all employers need to issue itemised payslips and key employment terms (KETs) to employees under the Employment Act. The ministry said the changes would help employees understand how their salary is calculated, and their employment terms and benefits. "This also helps employers prevent misunderstandings and minimise disputes at the workplace," MOM said.
When issuing monthly payslips, you will need to include these fields:
- Full name of your business.
- Full name of employee.
- Date of payment.
- Basic salary.
- Basic pay rate.
- Total number of hours or days worked.
- Salary period.
- Allowances.
- Additional pay.
- Salary deductions.
- Overtime hours and rate worked.
- Overtime pay.
- Overtime period.
- Total net salary paid.
When hiring, KETs need to be issued in writing to workers employed for 14 days or more.
You can take advantage of an assistance package to help with compliance, which includes funding, one-on-one support and software to generate itemised payslips.
To help SMEs to be compliant to the Ministry of Manpower requirements on issuance of itemised payslips and maintaining of records, myBusiness has introduced Essentials Payslip solution that allows SMEs to quickly and easily create and manage employee payslips. Get a FREE 5 users license version.
Changes for hiring foreign workers
If you're looking to hire foreign workers, you need to be aware of changes related to the Fair Consideration Framework (FCF), which aims to level the playing field for local Singaporean workers.
Since October 2015, before employing a foreign worker, you need to first advertise a job vacancy on the National Jobs Bank – including published salary ranges. After doing this, you can submit an Employment Pass (EP) application, which enables foreigners to work in Singapore.
You also need to submit more information when applying for the EP, which the MOM said will be used to assess "whether Singaporeans were considered fairly". This includes the number of applications submitted by Singaporeans and whether locals were interviewed – you may want to set up procedures to document this data so it's on hand if needed.
While the FCF applies to all companies, there are some exemptions concerning Jobs Bank advertising, including if your company has 25 or fewer employees, or if you're hiring for a job with a monthly salary of $12,000 or above.
Lean scheme to support SME innovation
Planning to innovate and boost productivity? You can now gain more flexibility to use foreign manpower under the Lean scheme, which Singapore's Association of Small and Medium Enterprises (ASME) hailed as a potential game changer for SMEs when it was launched in October.
The two-year pilot aims to help SMEs transition towards more manpower-lean business models and practices, and transfer skills to Singaporeans.
Under the scheme, temporary adjustments relax manpower policies that according to MOM "may hinder SMEs" trying to transform in a tight labour market. For example, dependency ratio ceilings cap the number of foreign workers companies can hire – prescribing a ratio for low and high-skilled foreigners.
Support will be tailored to the specific needs of SMEs carrying out transformational projects. It could allow companies to employ temporary foreign workers while recruiting Singaporeans, or pool foreign experts to transfer skills to locals.
A familiar scenario is that of a company temporarily increasing its foreign workforce in order to adopt more productive technologies while simultaneously planning to hire local replacements in the future. You can read more about how companies can benefit under the scheme.
With these changes in manpower policies just months away, now's the time to prepare. It's also worthwhile weighing the benefits of the Lean scheme – greater hiring flexibility can power your innovation plans in 2016. Remember to consider the following as you look forward:
- Follow the new guidelines on itemised payslips and KETs changes.
- Ensure you follow the Fair Consideration Framework for hiring practices.
- Evaluate if and how you want to use foreign talent in your team.
- Consider the Lean scheme to explore assisted ways to transform in the tight labour market.