Singapore to probe employers misclassifying employees

This is to prevent instances where employees may be terminated but rehired by employers looking to reduce costs, said the Ministry of Manpower.
By: | March 24, 2023

Singapore’s Ministry of Manpower (MOM) has pledged to investigate cases where employers misclassify their employees to evade fulfilling their obligations to them.

If employers engage in such practices, including terminating employees’ contracts of service and subsequently hiring them under conditions that essentially make them employees, action will be taken against them, said Zaqy Mohamad, Senior Minister of State (SMS) for Manpower.

He made the announcement while addressing concerns raised in a parliamentary session over safeguards for full-time and part-time drivers on contract of service covered under the Progressive Wage Model (PWM), an initiative by the Singapore government to help increase wages of employees through upgrading skills and improving productivity.

Concerns have been raised over how drivers may face contract termination and rehiring as platform drivers by employers looking to cut costs. Employers must meet wage requirements for drivers at various job levels under the new Occupational Progressive Wages for drivers, in addition to providing training and career pathways. However, platform drivers are not covered under the PWM.

READ: Employees in Singapore value digital skills over green skills

SMS Zaqy advised employers to consider their methods of contracting employees in a tight labour market, as affected employees may seek greater employment certainty elsewhere, leading to difficulties in ensuring sufficient manpower to meet business needs.

He also encouraged more employers to uplift wages and upgrade the productivity and skills of lower-wage employees by taking advantage of the Progressive Wage Credit Scheme, which provides transitional support to employers by funding up to 75% of the wage increases given in 2023.