28 April, 2016
The Employment Act ("EA") requirements regarding:
Itemised payslips;
Written Key Employment Terms ("KETs"); and
Detailed employment records,
came into effect on 1 April 2016. Employers who have not yet done so must review their employment documents, payslip forms and employment records, to ensure compliance with the new requirements.
These requirements apply to employees covered by the EA, who are generally non-managerial/non-executive employees regardless of salary level, and managerial/executive employees earning up to S$4,500 per month ("EA Employees").
The new requirements are recapped in brief below:
1. Provide itemised payslips
Employers must give EA Employees itemised payslips at least once a month together with, or within 3 working days of, salary payment. The payslip must include details such as payments and deductions per salary period, and overtime pay if applicable. Employers must keep records of all payslips issued.
2. Provide written KETs
Employers must provide written KETs to EA Employees who are hired on or after 1 April 2016 and who will be employed for a continuous period of 14 days or more. KETs must include details such as the leave entitlements and working arrangements (daily working hours, number of working days per week, and rest day if applicable).
3. Keep detailed employment records
Employers must maintain detailed employment records for each EA Employee, comprising:
Salary records, with the same information as required for the employee's itemised payslips; and
Employee records, with information such as the employee's working hours and public holidays and leave taken.
More details on these requirements can be found in our September 2015 update.
What this means for employers
Failure to comply with the new requirements can result in the Ministry of Manpower ("MOM") issuing an order to the employer to rectify the breach, or to pay financial penalties of $100 to $200 per employee or occurrence, depending on the type of breach.
The penalty for not complying with MOM's order is a fine of up to S$5,000. Officers of the company who permitted or willingly allowed the company's failure to comply with the order, or who failed to take proper care to comply with the order, may also be personally liable for a fine of up to S$5,000 and/or imprisonment of up to 6 months.
The MOM has stated that it will give employers a one-year grace period, during which it will adopt a light-touch enforcement approach. Notwithstanding, it is important for employers to take steps to review their employment documentation, payslip forms and employee records for compliance with the new requirements.
For further information, please contact:act:
Susan de Silva, Partner, Bird & Bird
susan.desilva@twobirds.com
