Singapore employers required to report salary cuts

Employers are now required to notify the Ministry of Manpower of any cost-saving measures that affect employees' salaries from March 12.
By: | March 13, 2020

Companies in Singapore are required to report any cost-saving measures that affect employees’ salaries to the Ministry of Manpower (MOM) from March 12.

The latest rule, which is intended to be a temporary measure until the economy recovers, applies to all employers with 10 or more workers.

“This is to encourage a sense of social responsibility and prevent downstream salary disputes,” Manpower Minister Josephine Teo said in a speech at the Singapore Business Federation on Mar 11.

“The notifications will also allow MOM to monitor the scope and scale of such measures, and whether more government interventions are needed,” she added.

Employers who fail to inform MOM of their cost-saving measures will be investigated and action will be taken.

The MOM also provided suggestions on how companies can handle spare manpower such as deploying employees to other departments or implementing flexible work schedules where they can reduce employees’ working hours by creating a ‘time bank’ of unused working hours which can be utilised in the future.

“Simply put, they are paid now for work later,” Teo said. “At some point in future, when overtime is required, the employer can then withdraw the extra hours based on an agreed formula.”