Companies employing staff in Singapore must notify MOM of any cost saving measures

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Cost saving measures

With effect from 12 March 2020, employers must notify the Ministry of Manpower (MOM) if they implement any cost-saving measures that will impact employees’ salaries. This new policy is in place to ensure companies manage excess manpower responsibly.

As an employer, you must notify MOM if you: 

  • implement any cost-saving measures affecting your employees’ salaries (excluding adjustments to discretionary payments such as bonuses and increments);
  • are registered in Singapore; and
  • have at least 10 employees.

If you plan to adjust salaries of your foreign employees, you will need to first seek approval from the Controller of Work Passes.

Before implementing cost-saving measures, all employers should consult and get the consent of unions and employees in good time. Employers must also ensure they communicate the impact of the measures clearly. Employers must notify within 1 week (7 calendar days) after your cost-saving measures are implemented via MOM’s online portal. The notifications will provide good insights for MOM to monitor the scope and scale of such measures, and whether more government interventions are needed. Employers that do not comply with the new measure will be investigated by MOM and action may be taken against.

As an employer, you are encouraged to consider alternatives to retrenchment to help keep your businesses viable and support your employees during economic downturns or difficult situations such as now (i.e., Covid-19), so that fewer jobs are lost. The Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment includes: training, redeployment, flexible work schedule, a shorter working week and temporary layoff.

As the COVID-19 situation continues to evolve, there may be additional requirements/measures introduced by MOM from time to time. While MOM will publicise these requirements/measures widely, it may not be possible to inform every employer or employee directly about each new set of requirements.

The information in this article was accurate as of 13/03/2020. Employers and employees are strongly advised to check the MOM’s website (http://www.mom.gov.sg/covid-19) for all the latest advisories.

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