Losing your job can be a stressful experience. In Singapore, while there's no legal mandate for severance pay, it's a common practice to offer financial support during a transition period. This article clarifies the intricacies of severance pay in Singapore, answering frequently asked questions.

What is Severance Pay and When Am I Eligible?

Severance pay, also called retrenchment or termination pay, is compensation given to employees when their employment ends under specific circumstances. In Singapore, eligibility generally requires at least 2 years of continuous service with the company. Those with less than two years might receive an ex-gratia payment (a goodwill gesture), but this isn't legally required.

Severance pay is usually provided in cases of:

How Much Severance Pay Am I Entitled To?

The amount of severance pay isn't fixed by law. Instead, it's typically calculated based on:

The common practice is to pay between 2 weeks to 1 month's salary per year of service. For instance, an employee with five years' service might receive between 10 weeks and 5 months' salary.

Example Calculation

Let's say you're a Marketing Manager earning $5,000 per month, with 5 years and 6 months of service. Your severance pay could range from:

Tax and CPF Implications

Severance pay in Singapore is generally not taxable if it compensates for the loss of employment, but payments in lieu of notice, gratuities, and other package components may be taxable as they relate to past services or aren't directly tied to job loss. Also, CPF contributions aren't payable on severance pay.

Find out about what is and what is not taxable in terms of payment on the IRAS official page.

Is Severance Pay Mandatory in Singapore?

No, severance pay isn't legally mandated in Singapore. However, it's a widely accepted practice, encouraged by the Ministry of Manpower (MOM) as part of responsible retrenchment practices. Employers are expected to adhere to severance pay terms outlined in employment contracts or collective agreements.

Can My Employer Refuse to Give Me Severance Pay?

While not legally mandatory, an employer refusing severance pay might face scrutiny, particularly if it violates a contractual agreement or responsible retrenchment guidelines. Employers can refuse if:

What Should I Do if I Don't Receive My Severance Pay?

If you believe you're owed severance pay, take these steps:

  1. Consult a lawyer: An employment lawyer can advise you on your rights.
  2. Calculate your entitlement: Determine the amount you believe you're owed.
  3. Negotiate: Try to resolve the issue with your employer.
  4. Document everything: Keep records of all communication.
  5. File a claim: If negotiation fails, consider filing a claim with the Ministry of Manpower (MOM) or contacting the Tripartite Alliance for Dispute Management (TADM).

Severance Pay for Foreigners

Severance pay rules are largely the same for foreigners and locals. However, foreigners face additional administrative procedures, including tax clearance from the Inland Revenue Authority of Singapore (IRAS) before receiving payment and work pass cancellation processes.

Minimum Employment Period

A minimum of two years of continuous service is generally required for severance pay eligibility.

Can I Negotiate My Severance Package?

Yes, you can negotiate. However, legal counsel is advisable to ensure a fair outcome. Consider your length of service, contributions, and the company's financial situation when negotiating.

Scenario Severance Pay Taxable? CPF Contribution?
Retrenchment after 5 years service 2-4 weeks salary per year No No
Termination for misconduct Usually none N/A N/A
Voluntary Resignation Usually none N/A N/A

Understanding Singapore's Senior Employment Credit (SEC) Scheme

Singapore's Senior Employment Credit (SEC) scheme is a government initiative designed to encourage employers to hire and retain older workers. This article provides a comprehensive guide to the SEC, addressing common questions and clarifying its intricacies.

What is the Senior Employment Credit (SEC) Scheme?

The SEC is a key component of Singapore's Senior Worker Support Package. It aims to ease the financial burden on businesses due to increased retirement (63 to 64) and re-employment (68 to 69) ages, along with higher CPF contribution rates for senior workers. This scheme provides wage offsets to employers who hire and retain Singaporean employees aged 60 and above, who earn up to $4,000 per month.

Key Components of the SEC Scheme:

How is each Senior Employment Credit (SEC) payout computed?

The SEC payout scheme varies depending on the employee's age and monthly wage, with more support provided for those earning up to $3,000 per month.

Wage Offsets (2023):

Age Group Up to $3,000 >$3,000 to <$4,000
Aged between 60 and 64 3% of wage $360 – (0.09 x wage)
Aged between 65 and 67 5% of wage $600 – (0.15 x wage)
Aged 68 and above 8% of wage $960 – (0.24 x wage)

Specific Examples:

SEC Payouts for 2024 and 2025:

Age Group Up to $3,000 >$3,000 to <$4,000
Aged 60-64 2% of wage $240 – (0.06*wage)
Aged 65-67 4% of wage $480 – (0.12*wage)
Aged 68 and above 7% of wage $840 – (0.21*wage)

Specific Examples:

Who is Eligible for the Senior Employment Credit?

To qualify for the SEC, both the employer and the employee must meet specific criteria:

Employee Eligibility:

Employer Eligibility:

Further informations can be found at IRAS official page of Senior Employment Credit (SEC).

Age Requirements for Employees

The age requirement for SEC eligibility is currently 60 years and above (2023-2025). Previously (2021-2022), the age was 55 and above.

Do Employers Need to Apply Separately for the SEC?

Employers do not need to submit a separate application for the SEC (Special Employment Credit). The Inland Revenue Authority of Singapore (IRAS) automatically processes the SEC based on the employer's existing Income Tax and GST notification preferences. This streamlined approach ensures that eligible employers receive the SEC without the need for additional paperwork or requests. However, employers should ensure their tax records and notification preferences are up to date to avoid any delays or errors in receiving the credit.

Senior Employment Credit vs. Other Employment Support Schemes

The SEC differs from other schemes such as the Enabling Employment Credit (EEC) and CPF Transition Offset (CTO). Here's a comparison:

Scheme Objective Eligibility Benefits
SEC Support employers hiring senior workers Singaporean workers aged 60+, earning up to $4,000 Wage offsets (2-7%) based on age and wage
EEC Support employment of persons with disabilities Persons with disabilities aged 13 and above, monthly earnings below $4,000 Wage offsets (up to 20%, capped at $400)
CTO Offset increased CPF contribution rates for senior workers Local employees aged 55-70 50% of annual increase in employer CPF contribution rates

How Long Will the Senior Employment Credit Scheme Be Available?

The SEC scheme is currently extended until 2025.


**Note**: For wages paid between 1 Jan 2024 and 31 Dec 2025, employers will receive up to 7% of the wages paid to these eligible workers, depending on their age and wage.

Can Part-Time Senior Employees Qualify?

Yes, part-time senior employees can qualify if they meet all other eligibility criteria (Singaporean citizen, aged 60+, earning up to $4,000, timely CPF contributions).

Singapore's dynamic economy attracts a large international workforce. Thus, securing a work pass is crucial for anyone seeking legal employment in the Lion City. This Singapore work passes guide provides a detailed overview of the various work pass categories, application processes, eligibility criteria, and related matters to help you navigate this complex system.

Types of Work Passes in Singapore

Singapore offers a diverse range of work passes, each tailored to specific skill levels and employment types. The main categories include:

Work Passes for Professionals

Work Passes for Skilled and Mid-Level Workers

Work Passes for Trainees and Students

Short-Term Work Passes

Specialized Passes

The Work Passes Application Process

  1. Secure a Job Offer:

    Obtain a job offer from a Singapore-registered company, and the employer will handle the application.

  2. Gather Required Documents:

    This includes passport copies, educational certificates, employment testimonials, and company's business profile (ACRA registration).

  3. Submit the Application:

    Obtain a written consent from the employee. Once consent is secured, log in to the appointed MOM portal to complete the application form. A fee of $35 per application is required, payable via GIRO, Visa, or Mastercard. After submission, check the application status after 1 week, keeping in mind that processing may take longer if additional information is needed.

  4. Receive In-Principle Approval (IPA) Letter:

    If approved, the employer receives an IPA letter, allowing the employee to travel to Singapore within a specified timeframe. But make sure the employee’s IPA particulars match their passport details. For any errors (e.g. wrong spelling of names), the employer needs to correct the error. Otherwise, the employee will be denied entry into Singapore.

  5. Enter Singapore and Apply for Work Pass Issuance:

    Upon arrival, the employer applies for work pass issuance. The employee provides additional details and completes medical examinations.

  6. Register and Receive the Work Pass Card:

    The employee registers at the Employment Pass Services Centre (EPSC), undergoes fingerprinting, and receives the work pass card.

Minimum Salary Requirements for Work Passes

Minimum salary requirements vary significantly based on the work pass type and often increase with age and experience. Further, always check the latest MOM guidelines for the most accurate information.

Work Pass Type Minimum Monthly Salary (SGD) - Current/Upcoming
Employment Pass (EP)
  • Current criteria:
    • $5,000 a month (in general)
    • $5,500 a month (for financial services)
  • From 1 January 2025, the EP qualifying salary:
    • $5,600 a month (in general)
    • $6,200 a month (for financial services)
S Pass
  • Current criteria:
    • $3,150 a month (in general)
    • $3,650 a month (for financial services)
  • For new applications from 1 Sep 2025, and for renewals from 1 Sep 2026:
    • $3,300* a month (in general)
    • $3,800* a month (for financial services)
Work Permit None
Overseas Networks & Expertise (ONE) Pass SGD 30,000 (exceptions may apply)

Processing Times

Processing times vary. However, online applications are generally faster (around 10 business days), while manual applications or those from overseas companies can take up to 8 weeks or longer.

Required Documents

The specific documents required depend on the type of work pass. To demonstrate, general documents include passport copies, application forms, consent letters, educational and employment documents. Moreover, specific passes may require additional documentation like medical insurance details, company business profiles, or professional body supporting documents. Indeed, always refer to the MOM website for the most current and comprehensive list.

Family Members Joining You

Family members can join you in Singapore if you hold an eligible work pass (EP, S Pass, ONE Pass, EntrePass), meeting certain income and eligibility requirements. But they'll need to apply for a Dependent's Pass (DP) or potentially a Long-Term Visit Pass (LTVP). Read more about family leave in Singapore for details about family-related policies.

Work Pass Validity

The validity periods for work passes can vary significantly depending on the type of pass. For instance, Employment Passes (EPs) are typically issued for an initial period of two years and can subsequently be renewed for up to three years. Similarly, S Passes are valid for up to two years and are renewable as well. On the other hand, other passes often have shorter durations, which are usually tied to the nature and length of the assignment. Therefore, it is crucial to understand the specific validity period associated with each pass type.

Educational and Experience Requirements

When it comes to educational and experience requirements, these also differ depending on the type of work pass. For example, Employment Passes require candidates to meet a high standard of education and relevant work experience. In contrast, S Passes and Work Permits have comparatively less stringent requirements. Hence, it is essential to always consult the specific criteria for the pass type you are applying for to ensure eligibility.

Switching Employers

The ability to switch employers largely depends on your work pass type. For instance, Employment Pass (EP) holders must apply for a new pass when changing jobs. In contrast, Personalised Employment Pass (PEP) holders enjoy greater flexibility and do not require a new application to switch employers within the validity of their pass. Other work pass holders, such as S Pass or Work Permit holders, typically need to go through a new application process as well. Additionally, it is important to adhere to the notice period requirements set by your current employer to ensure a smooth transition.

Losing Your Job

If you lose your job, your EP will be cancelled, and you'll be issued a Short Term Visit Pass (STVP). You have a limited time to find new employment or make arrangements to leave Singapore. Failure to comply with these regulations can lead to overstay fines and legal consequences. It's imperative to act promptly and adhere to all MOM guidelines. For more information on rights and responsibilities, see termination without cause in Singapore.

Conclusion

Navigating the various work passes in Singapore can feel overwhelming, especially with the specific criteria and processes involved. However, with a comprehensive work pass guide, you can confidently understand your options and make informed decisions. Whether you're an employer seeking to hire talent from overseas or an individual planning your next career move, staying informed about the latest requirements and updates ensures a smoother application process and compliance with local regulations. Let knowledge be your first step toward success in Singapore's dynamic workforce landscape.

Long Service Awards (LSAs) are a common practice in Singapore to recognize and reward employees for their loyalty and dedication. This guide provides a comprehensive overview of LSAs, addressing frequently asked questions and clarifying key aspects.

Eligibility and Benefits of Long Service Awards

Years of Service Required

The number of years required to qualify for an LSA varies significantly depending on the company's policies and industry standards. There's no single national standard. Common milestones include 5, 10, 15, 20, 25, and 30 years of continuous service. Eligibility typically applies to full-time employees, but some companies may extend this to part-time employees based on their individual policies. The specific requirements are outlined in each company's HR policies.

Types of Rewards

LSAs can be monetary or non-monetary. Monetary rewards can vary greatly. For example:

Non-monetary rewards may include:

CPF Implications on Long Service Award (LSA)

CPF contributions are payable on cash awards given to your employee in recognition of his long service.

However, CPF contributions are not payable on Long Service Award (LSA) that is given to your employee with at least 5 years of service and subsequent LSA for each 5-year period of service with you, up to the amount of your employee’s Ordinary Wages (OW) for the month in which the LSA is paid. In the event that there are multiple types of LSA given to the same employee, only the first LSA granted to the employee in each 5-year period can qualify for this exemption.

If the LSA exceeds the OW for the month, CPF contributions are payable on the amount in excess of OW. If your employee has no OW payable in that month, CPF contributions are payable on the entire LSA.

Long Service Award (LSA) Scenarios Are CPF contributions payable?
LSA amount is OW and below No
LSA amount  is more than OW Yes, on the amount of LSA exceeding OW
OW is $0 Yes, on the entire LSA

Tax Implications on Long Service Award (LSA)

The Inland Revenue Authority of Singapore (IRAS) classifies all gains and profits derived by an employee in respect of his/her employment as taxable, unless specifically exempt from income tax or covered by an existing administrative concession. In the case of Long Service Awards,

Understanding Long Service Awards in Singapore

LSAs are a formal recognition program designed to reward employees for their long-term commitment and contributions to an organization. They are a valuable tool for boosting employee morale and retention. The specific details of an LSA program are entirely at the discretion of the employer.

Effect of Breaks in Service or Role Changes

Breaks in service can affect eligibility, depending on the company's policy. Some companies may reset the tenure count for significant breaks, while others may allow cumulative service periods. Role changes within the same company usually do not affect LSA eligibility, provided continuous employment within the organization.

Best Practices for LSA Programs

Effective LSA programs should be:

  1. Define Clear Criteria
    • Establish transparent eligibility requirements based on tenure and performance.
    • Apply criteria consistently across all departments to ensure fairness.
  2. Select Meaningful Awards
    • Offer valuable and diverse options like monetary bonuses, extra leave, or personalised gifts.
    • Cater to individual preferences to make the awards more meaningful.
  3. Personalise Recognition
    • Include personal touches like the employee's name or a heartfelt message.
    • Celebrate milestones through dedicated events to make recognition memorable.
  4. Communicate the Programme
    • Clearly share details about the programme’s purpose, criteria, and awards.
    • Use internal channels to provide regular updates and reminders.
  5. Gather Feedback and Improve
    • Collect employee input through surveys or conversations to assess the programme’s impact.
    • Continuously refine the LSA to ensure it stays relevant and valued.

Frequently Asked Questions

Is the Long Service Award Mandatory?

No, the Long Service Award is not mandatory for employers to provide in Singapore. It's a voluntary initiative that would benefit both employers and employees.

Are Part-Time Employees Eligible?

Eligibility for part-time employees depends entirely on the company's policy. While guidelines often mention full-time employees, some companies may include part-time workers.

How is the Long Service Award Presented?

Long Service Awards are typically presented during company anniversaries, annual dinners, special award ceremonies, or on the employee's service milestone date.

Can Previous Employment Years be Counted?

This depends entirely on the new employer's policy. Some companies may consider cumulative service, while others may reset the count upon new employment.

What Happens with Breaks in Service?

The impact of a break in service depends on the company’s policy. Some may reset the tenure count, while others may allow cumulative service periods. Short breaks (e.g., less than 30 days) may be disregarded in some instances.

Conclusion

Long Service Awards in Singapore are a powerful tool for showing appreciation for employee loyalty and dedication. While not legally mandated, they are a common and valuable practice. Understanding the specific policies of your employer is crucial for knowing your eligibility and the type of award you might receive.

Understanding Annual Leave Entitlement in Singapore

In the Singapore business landscape, navigating annual leave entitlements in Singapore can be confusing. This comprehensive guide clarifies your rights and responsibilities as an employee, addressing common questions and concerns.

What is Annual Leave Entitlement in Singapore?

To qualify for annual leave entitlement, the employee must work for your employer for at least 3 months without a break in service to be eligible for annual leave.

Calculation

Annual leave entitlement is based on completed years of service. Keep reading to find the anual leave entitlement in detail.

Pro-ration

If you don't complete a full year, the company pro-rates your annual leave based on the months you worked. This rule applies during probation and if you leave the company mid-year.

Additional Leave

In different scenario, employers may offer more leave than the statutory minimum of 14 days as a benefit.

How Many Days of Paid Annual Leave Am I Entitled To?

In Singapore, your paid annual leave is determined by the Employment Act (EA) and your length of service. The minimum entitlement is:

Year of Service Days of Annual Leave
1st 7
2nd 8
3rd 9
4th 10
5th 11
6th 12
7th 13
8th and thereafter 14

How is Annual Leave Calculated for New Employees in Their First Year?

The first thing to be eligible for annual leave is that you need at least 3 months of service to qualify for paid annual leave. Additionally, the minimum is 7 days after 3 months of service.

Pro-ration formula

The formula for pro-rated leave is: (Number of months of service / 12 months) * Days of annual leave entitlement.

*Results are rounded up to the nearest whole day (except for results less than 0.5 days, which are rounded down).

Example Calculation

Jenie is an employee starting work on January 1st and leaving on July 31st (6 months) with a 7-day entitlement. Therefore, she would receive (6/12) * 7 = 3.5 days, rounded up to 4 annual leave days.

Can My Employer Reject My Annual Leave Request?

While employers can't arbitrarily deny leave, they can reject or adjust dates due to operational needs (e.g., peak periods, insufficient staffing). However, they should propose alternative dates and maintain fair, consistent practices. Essentially, open communication is crucial.

What Happens to Unused Annual Leave When I Resign?

You can typically encash or clear unused leave when you resign. Encashment is calculated based on your gross rate of pay at your last drawn salary. However, if you are terminated for misconduct, any unused leave is forfeited. Additionally, you can use annual leave to offset your notice period.

Can Annual Leave Be Carried Forward to the Next Year?

This depends on whether you're covered under Part IV of the Employment Act (monthly basic salary of $4,500 or less for workmen, or $2,600 or less for non-workmen). If so, unused leave can be carried forward to the next 12-month leave cycle, but encashment after this period is at the employer's discretion. For employees not covered under Part IV, the employment contract dictates the policy.

Am I Entitled to Annual Leave During My Probation Period?

Yes, after completing at least 3 months of service or more, you are entitled to pro-rated annual leave, regardless of probation status. If your probation is less than 3 months, leave is at your employer's discretion.

How is Annual Leave Entitlement for Part-Timers?

Part-time employees are entitled to pro-rated annual leave based on their working hours compared to a full-time employee. This can be calculated using a pro-rata basis or an accrual system.

Formula (pro-rate):

(No of working hours per year of part-time employee ÷ No of working hours per year of a similar full-time employee) x no of days of annual leave of a similar full-time employee with equal length of service x number of working hours in a day of a similar full-time employee

Example:

John is a part-timer that works 5 hours a day for 4 days a week (20 hours per week). A similar full-timer works 8 hours a day for 5 days per week (40 hours per week). The full-timer’s leave entitlement is 14 days in the first year.

The part-timer’s entitlement after 3 months is therefore 56 hours, as calculated below:

[(20 hours × 52 weeks) ÷ (40 hours × 52 weeks)] × 14 days × 8 hours per day = 56 hours

What Happens if I Fall Sick During My Annual Leave?

You can ask your employer to switch to sick leave, but this is at their discretion.

Can My Employer Force Me to Clear My Annual Leave?

No. Employers cannot force you to take leave at a specific time. While they can reject requests based on operational needs, they cannot compel you to take leave against your will.

A Certificate of Employment (COE) in Singapore is a crucial document verifying an individual's employment history and current status. While it is not legal obligation, obtaining a COE is common professional courtesy and essential for various personal and professional purposes. This guide addresses frequently asked questions about obtaining and utilizing a COE in Singapore.

What is a Certificate of Employment and Why Do I Need It?

A Certificate of Employment (COE) is an official document provided by an employer that verifies an individual’s employment history. It is vital for:

A comprehensive Certificate of Employment (COE) includes your name, NRIC/FIN number, job title, employment dates, salary, job responsibilities, and sometimes the reason for leaving (if applicable).

What Information Should Be Included in a Singapore Certificate of Employment (COE)?

A comprehensive Certificate of Employment (COE) should include:

Who qualifies for a Certificate of Employment (COE)?

In general, any employee in the organization qualifies for a Certificate of Employment (COE). This includes:

How Do I Get a Certificate of Employment (COE) from My Employer?

Requesting a COE is a straightforward process, whether you're currently active or have left the company. Follow these steps:

Requesting the Certificate

Sample Request Letter

[Your Name]
[Your Address]
[City, Postal Code]
[Date]

[Employer’s Name]
[Employer’s Position]
[Company Name]
[Company Address]
[City, Postal Code]

Dear [Employer’s Name],

I am writing to request a certificate of employment from [Company Name]. I need this document for [state the purpose, e.g., applying for a loan or visa].

Could you please include the following details in the certificate:
- My full name and NRIC/FIN number
- My job title and job description
- My employment dates (start and end dates if applicable)
- My current salary and any other relevant employment details

Thank you for your assistance.

Sincerely,
[Your Name]

Key Components of the Certificate of Employment (COE)

Procedure for Employers

While not legally obligated, employers generally provide a Certificate of Employment (COE) as a matter of good practice. Even if an employee is on no-pay leave, the employer should provide the Certificate of Employment (COE) if the request is legitimate.

Directing the Request

For specific purposes (e.g., bank loan), the employer may send the Certificate of Employment (COE) directly to the requesting party after verifying the employee's request.

Can My Employer Refuse to Provide Me with a Certificate of Employment (COE)?

While there's no legal obligation, refusing a Certificate of Employment (COE) request is generally frowned upon. A polite and formal request increases the likelihood of receiving one. If refused, consider understanding the reasons behind the refusal and explore alternative documentation options. If the refusal is related to an employment dispute, seek legal advice.

How Long Should Employers Take to Issue a Certificate of Employment?

There's no legally mandated timeframe. However, a prompt response within a few days to a week is generally expected. Unreasonable delays may warrant further investigation.

How Long Should I Keep My Certificate of Employment?

It's advisable to retain your Certificate of Employment (COE) for at least six years from the termination date, aligning with general employment record retention guidelines in Singapore.

Do Employers in Singapore Charge a Fee for Providing a Certificate of Employment?

No, employers typically do not charge a fee for issuing a Certificate of Employment (COE). It's considered a professional courtesy.

What Can I Do If My Employer Delays or Refuses to Issue My Certificate of Employment (COE)?

If your employer delays or refuses, follow these steps:

  1. Formal Written Request: Document your request.
  2. Clarify Employment Status: Ensure you're still considered an employee.
  3. Provide Necessary Details: Supply information for verification purposes.
  4. Seek HR Advice: Consult HR professionals or relevant forums.
  5. Legal Considerations: If related to a dispute, seek legal counsel.
  6. Escalate the Issue: Contact higher authorities within the company or external bodies if necessary.

Are Digital Certificates of Employment Accepted in Singapore?

Yes, digitally signed certificates issued by trusted Certification Authorities are legally recognized and accepted in Singapore, following the Electronic Transactions Act.

Conclusion

Obtaining a Certificate of Employment in Singapore is generally a straightforward process. Understanding the necessary information, preparation of a formal request, and knowledge of your rights as an employee will assist in obtaining this vital document quickly and efficiently.

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