Knowledge Highlights 28 April 2020
On 25 April 2020, the Ministry of Manpower (“MOM”) issued an updated “Advisory on salary and leave arrangements during circuit breaker” (“Advisory”) following the extension of the circuit breaker until 1 June 2020 from the original period of 7 April 2020 to 4 May 2020 (“circuit breaker”). The Advisory was first issued on 6 April 2020 to provide guidance to employers and employees on salary and leave arrangements amid the heightened safe distancing measures to suspend activities at most workplace premises during the circuit breaker.
The circuit breaker had been announced by the Multi-Ministry Taskforce (“Taskforce”) on 3 April 2020 to pre-empt the trend of increasing local transmission of Covid-19. The measures are intended to further reduce the movements and interactions of people. On 21 April 2020, the Taskforce announced that it would extend the Circuit Breaker until 1 June 2020 to further curb the spread of Covid-19.
A tightened list of Essential Services and their related supply chains and service providers are exempt from the circuit breaker. Nonetheless, these employers must ensure that all activities that can take place through telecommuting are done from home and must implement safe distancing measures to reduce physical interactions for the activities carried out at the workplace premises.
All other business, social, or other activities that cannot be carried out from home must be suspended.
Employers that can continue operating their businesses (in limited or full capacity) with their employees working from home should continue to do so.
1. Wage support under Jobs Support Scheme
The Jobs Support Scheme (“JSS”) announced by the Government is meant to support employers to retain and continue to pay their local employees, even during periods of reduction in business activity.
Employers will now receive four payouts under the JSS. The payouts originally scheduled in April, July and October 2020 will proceed as announced. There will now also be an additional payout in May 2020 for the extended Circuit Breaker period. The JSS for the months of April and May 2020 is enhanced to 75% of monthly wages to provide more support to employers and employees. For other qualifying months, the JSS support varies by sector.
2. Guidelines for employers that have implemented cost-saving measures
Some employers which have been severely affected by Covid-19 prior to the current suspension of activities at workplace premises would have worked out cost-saving measures with their unions and employees to save jobs (e.g. asking employees to take four days of no-pay leave each month), taking into consideration the JSS. Such cost-saving measures should continue.
However, in view of the enhanced JSS payout for April and May 2020, the Advisory states that employers should review whether the additional support could be shared with the employees during this exceptional period to minimise hardship to them. This should be done in consultation with the union if the company is unionised and communicated to the employees.
Where employers have agreed to salary arrangements that are more generous than those recommended in the Advisory, such arrangements should continue during the circuit breaker period.
3. Guidelines for employers on salary and leave arrangements that have not implemented cost-saving measures
Tapping on enhanced JSS payout instead of resorting to retrenchments or prolonged no-pay leave
The Advisory states that employers who have not implemented any cost-saving measures are strongly urged not to resort to retrenchments or prolonged no-pay leave to manage business costs during the circuit breaker period. Employers should tap on the enhanced JSS payout for April and May 2020 (75% of one month of wages) to pay the baseline monthly salaries of employees.
Payment of salaries of local employees who continue to work full-time during circuit breaker period
Employees working in essential services, or those in non-essential services who are telecommuting from home, must be paid their prevailing salaries including the employer’s CPF contributions. Companies that have done well and are still doing well could also consider recognising the efforts and contributions of employees during the circuit breaker period, e.g. through additional incentives such as food vouchers.
Payment of salaries of local employees who do not work full-time during circuit breaker period
In respect of local employees who do not work full-time during the circuit breaker period, employers should tap on the enhanced JSS payout to continue paying employees, and adopt at least the following recommended salary arrangements (from 7 April 2020 to 1 June 2020):
Gross monthly salary of local employee
Up to S$4,600
More than S$4,600
Employer assigns work to employee to complete at home
Continue to pay their prevailing salaries, including employer’s CPF contributions.
Use the enhanced JSS payout for April and May 2020 to provide for a baseline monthly salary to employees including the employer’s share of the CPF contributions; and
Provide for work done on a pro rata basis. For example, if the employee works half-load (i.e. at 50%), the employer should pay the employee 50% of their monthly salary in addition to the abovementioned baseline monthly salary, subject to a cap of their prevailing salary.
Employer does not assign work to employee
Use the enhanced JSS payout for April and May 2020 to provide for a baseline monthly salary to employees including the employer’s share of the CPF contributions.
Making up for shortfalls in employee’s salary
If, after implementing the salary arrangements in the table above, the employee’s salary still falls below their prevailing monthly salary before the circuit breaker period, the Advisory provides that the employer should, as far as possible, consider the following measures to top up the shortfall:
- Send the employee for training courses approved for Absentee Payroll Funding so that the overall salary paid to the employee during the training period would be mostly supported by the Government;
- Apply for Flexible Work Schedule (“FWS”), which allows “time banking” of additional salary payments to offset overtime payments in the future;
- Grant additional paid leave to the employee; or
- Allow the employee to consume their existing leave entitlements.
Encouraging employees to take on a second job
The Advisory states that where possible, employers should also allow and support their local employees to take on a second job (e.g. part-time or temporary job with another employer) in companies or public agencies that could continue to operate during the circuit breaker to make up for the employees’ loss of income and mitigate the negative impact on their livelihoods.
Employers can refer to the “Guide on second job arrangements for employees with reduced work hours in response to Covid-19”. Employers may wish to encourage affected employees to consider suitable job opportunities under the SGUnited Jobs Initiative.
MOM recognises that some employers can themselves be facing financial difficulties with poor business prospects and may need to use the enhanced JSS payouts to cover some fixed overheads to keep the business going. The Advisory states that employers should not act unilaterally and put their employees on prolonged no-pay leave without any baseline salary. Employers should discuss with their unions and employees and come to an agreement on how the JSS payouts are to be used to ensure their business survival as well as provide some salary support to their employees.
In working out such arrangements, employers should give special consideration to their lower wage employees (e.g. employees who qualify for Workfare Income Supplement) and provide more support to them to alleviate any hardship.
The Advisory states employers will receive correspondingly lower JSS payouts in subsequent tranches if they reduce employees’ salaries or put them on no-pay leave.
4. Foreign employees
Foreign Worker Levy waiver and rebate
On 6 April 2020, the Government announced a waiver of the March 2020 Foreign Worker Levy (“FWL”) due in April 2020 to help firms cut costs and improve their cashflow. Employers will also receive a one-off FWL rebate of S$750 for each work permit or S Pass holder, for levies paid in 2020. Employers will additionally be provided an FWL rebate of S$750 for each work permit or S Pass holder in employment as at 1 May 2020 and a waiver of the April 2020 FWL due in May 2020. This will enable employers to preserve their manpower in order to quickly resume operations after the circuit breaker period.
Employers are required to submit an online acknowledgement to MOM for the additional FWL rebate for the month of May 2020.
Provision of salary support to foreign employees by employers
In light of the support given to employers, employers should provide salary support, including payment for upkeep and well-being of their more vulnerable foreign employees in Singapore during the circuit breaker. In this regard, foreign employees who continue to work full-time must be paid their prevailing salaries.
For foreign employees who could not work, employers must continue to be responsible for their maintenance and upkeep and work out mutually agreed salary and leave arrangements with the unions and employees, especially for low-wage work permit holders who may need more support. The Advisory provides that employers can ask their foreign employees to consume their leave entitlements. For example, where leave entitlements are exhausted, employers should provide salary support for their foreign employees and may apply for FWS to time-bank part of the salaries to cover overtime work after the circuit breaker period. The quantum of salary and upkeep (e.g. housing) support provided by employers to the work permit holders should not be less than the FWL rebates given by the Government.
In view of the levy waivers and rebates, daily allowance paid to employers of workers on Quarantine Orders (“QO”) or Stay-Home Notice (“SHN”) will no longer be provided to employers. For foreign workers on QO or SHN that begins in April or May, employers will also not be eligible for a further levy waiver, since the levies payable in April and May 2020 are waived. Foreign workers on QO or SHN subsequent to May 2020 are eligible for levy waiver.
Employers of Employment Pass (“EP”) holders will not receive the rebate as there is no foreign worker levy. They will continue to receive daily support of S$100 for their EP holders on QO or SHN if these workers are unable to telecommute.
5. Notification requirements for cost-saving measures with salary reductions during circuit breaker period
Employers that implement cost-saving measures during the circuit breaker period between 7 April 2020 and 1 June 2020 (inclusive) must notify MOM if the cost-saving measures result in a more than 25% reduction in the monthly salaries of their employees and the employer has at least 10 employees.
6. Reminder to all employers
MOM reminds all employers to treat employees, both local and foreign, fairly and responsibly, taking into consideration the significant support provided by the Government to manage business costs and protect jobs.
The Advisory states that employers should follow the guidelines on salary and leave arrangements as set out in the Advisory.
MOM will investigate complaints against employers who wilfully disregard the Advisory and put workers on extended no-pay leave or other cost saving measures without engaging or seeking the consent of their employees. MOM may also suspend JSS / FWL payouts to these employers until investigations are complete. Where there is evidence of irresponsible or unfair treatment, employers may be denied employment support (including JSS and FWL rebate) and have their work pass privileges curtailed.
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