Pay rise of 6% to 8% recommend for lower-wage workers in Singapore

Employers in Singapore are being asked to raise the pay of lower-wage workers earnings up to S$2,800 a month by 6% to 8%, or by at least S$120, under the latest guidelines from the National Wages Council (NWC).

The council, a tripartite body of government, employer and union representatives, released its annual recommendations on pay and employment. For the first time, the guidelines carve out a separate category for businesses that have not performed well and are unprofitable, in recognition of the economic difficulties some employers are facing.

Companies that have done well are expected to give lower-wage employees a pay rise of at least S$135 to S$170. Those that have not done well but remain profitable should provide a built-in wage increase at the lower end of the 6% to 8% range, or at least S$120, whichever is higher. Under the new category, employers that have not done well and are making a loss should still give a raise of at least S$120. Across the board, employers are asked to review salaries and consider further increases for lower-wage workers if business prospects improve.

The guidelines cover employees in both the public and private sectors and apply from 1 December 2026 to 30 November 2027. They have been accepted by the government but are not mandatory. The council met from August to October to draw them up.

The new tier follows a lukewarm uptake of last year’s recommendation. Speaking at a press conference at the Ministry of Manpower (MOM), the ministry’s permanent secretary Stanley Loh said about a quarter of employers adopted the 2025 guidelines, which proposed a 5.5% to 7.5% increase for lower-wage workers. Another 60% raised wages, though not to the recommended levels.

Kuah Boon Wee, President of the Singapore National Employers Federation (SNEF), said many companies had found the previous range difficult to meet. “That’s why we came up with a category that hopefully will allow the percentage of adoption to go up,” he said. About 20% of Singapore’s resident workforce earn S$2,800 or less a month.

K Thanaletchimi, President of the National Trades Union Congress (NTUC), pointed to safeguards such as the Industrial Relations Act, which help ensure employers are open about their financial performance. “When you are transparent, you build trust with your workers,” she said.

The recommendations land against a mixed economic backdrop. Singapore’s economy has performed more strongly than expected, but the outlook remains uncertain. The council said growth for the rest of the year will be underpinned by outward-oriented segments and sectors tied to the AI technology cycle, even as industries hit by supply disruptions in the Middle East continue to struggle.

“Notably the food and beverage is a sector that has been struggling. That’s why for this year, achieving a balance is important because no employers are the same,” Kuah said.

NWC chairman Hsieh Fu Hua said the council is calling for a “positive-leaning approach” to wage increases, although business performance and productivity growth have been uneven across sectors. Employers should therefore have room to calibrate increases to their own performance and prospects.

The council also urged employers that have not yet done so to implement the Flexible Wage System (FWS) in full, including both its annual and monthly variable components. The system allows companies to adjust wages when conditions turn, so they can cut costs without cutting jobs.

Beyond pay, this year’s guidelines place considerable weight on preparing employers and workers for an AI-enabled economy. “AI presents significant opportunities to raise productivity, create new sources of value and strengthen Singapore’s competitiveness,” the NWC said in its statement.

Training figures suggest ground has been lost. According to MOM’s employer-supported training survey, the share of employers offering structured training to employees fell from 66.4% in 2024 to 64% in 2025, while the share of employees receiving it dropped from 52.6% to 48.1%. Loh said the government supports the council’s call for employers to invest proactively in enterprise transformation and for employees to keep their skills current.

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For employers, the council recommended preparing employees for emerging roles such as AI ethics officers and green tech specialists, supporting employee-initiated training, and making use of subsidies for programmes funded by the Skills and Workforce Development Agency. Companies are also encouraged to adopt AI effectively and responsibly, and to redesign jobs alongside business transformation, drawing on support such as NTUC’s job placement and training programmes.

HR practitioners are singled out as well. The council encouraged them to upskill and obtain certification from the Institute for Human Resource Professionals (IHRP), building the capabilities needed to support work transformation within their organisations.

Workers, meanwhile, are urged to build AI literacy on top of their domain expertise, judgement and human skills to become what the council calls “AI bilingual” individuals, opening up opportunities across firms and sectors.

Thanaletchimi called on employers to give workers protected time to build relevant skills and move into higher value-added roles, particularly in AI. “In practical terms, this means planning workloads and work arrangements so that employees can attend relevant training without having to compromise their work responsibilities or solely rely on their personal time,” she said, reported The Straits Times.