29 June 2020
On 29 May 2020, the Employment (Returns on Salary Reduction Measures) Notification 2020 (“Notification”) came into operation. Under the Notification, an employer with 10 or more employees who intends to reduce operating expenses by implementing any of the following measures in relation to one or more of its employees must submit to the Commissioner for Labour of the Ministry of Manpower (“MOM”) the particulars of the measure implemented in the prescribed form:
- a reduction in the number of hours that an employee is required to work, that results in a reduction of the salary payable to the employee;
- giving an employee a leave of absence with reduced salary or without salary for an agreed period;
- a reduction in an employee’s gross rate of pay, but not a reduction or withholding of a wage increment.
In the instructions to the prescribed form, it is stated that employers who (i) implement temporary cost-saving measures that result in more than 25% reduction in the gross monthly salary for local employees or more than 25% reduction in the basic monthly salary for foreign employees, and (ii) have at least 10 employees, are required to notify MOM.
The prescribed form must be submitted, as the case may be:
- within seven days after the day the employee starts working the reduced number of hours.
- within seven days after the day the employee starts the leave of absence; or
- within seven days after the employee’s contract of service is varied to reduce the employee’s gross rate of pay.
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