Employers may cut wages to save jobs, says National Wages Council

Companies in Singapore have been given the green light to temporarily cut wages to avoid and minimize retrenchments.
By: | October 16, 2020



Employers in Singapore may implement temporary wage cuts if it means saving jobs, said the National Wages Council (NWC) in their latest updated guidelines.

However, companies should seek employees’ support before doing so and they should be informed how their wages will eventually be restored.

The guidelines, which will apply from November 1 to June 30 next year, are not compulsory but have been accepted by the Singapore government.

Six key principles were also laid out for employers who implement wage cuts. For example, employers should use the annual and monthly variable components to adjust wages and that they cut basic pay only if really necessary to avoid retrenchments. In addition, management should take earlier and deeper cuts to their wages.

The NWC also recommended that wage freeze should be the first option before wage cuts for employees earning up to S$1,400 a month. And those who earn more than that should not have their salary below that amount after the wage cut.

“There was a lot of give and take and very importantly a lot of trust among the tripartite partners to come up with solutions that are best not only for companies but also employees,” he said at a press conference on Friday,” said NWC chairman Peter Seah