Saturday, 2 April 2016

Itemised payslips a must from 1 April 2016

Bosses must also provide key employment terms in writing under changes to labour law
By Joanna Seow, The Straits Times, 1 Apr 2016

Companies will have to issue itemised payslips to employees from today, as landmark changes to the Employment Act kick in.

Employers will also need to provide key employment terms, covering matters such as working arrangements, main duties and fixed salary deductions, in writing.

As of 1 April 2016, employers are required to issue itemised payslips and key employment terms to employees covered under the Employment Act. Read more at
Posted by Singapore Ministry of Manpower on Friday, April 1, 2016

These were among amendments to Singapore's main labour law passed last year with the aim of preventing misunderstandings and minimising disputes between bosses and workers.

Employers who do not follow the new rules can be fined from $100 to $200 per employee or occurrence.

But the Ministry of Manpower (MOM) reiterated in a statement yesterday that it will "adopt a light-touch enforcement approach" for the first year, and will focus on educating employers about the changes.

Payslips, which can be in hardcopy or softcopy format, must detail items such as a worker's basic salary, deductions and overtime hours. These are crucial to ensuring that both employers and low-wage workers are protected in case of disputes, said labour MP Zainal Sapari.

"Without it, workers who are less educated and less aware of their rights may be taken advantage of by companies," said the assistant secretary-general of the National Trades Union Congress.

For example, some employers tell workers they can get more money in hand if they accept their pay in cash without making contributions to the Central Provident Fund. But workers do not realise they lose out on the employer's contribution, said Mr Zainal.

The change affects all workers covered by the Employment Act, which does not include managers and executives earning a monthly basic salary of more than $4,500.

It comes after recent efforts, such as higher Workfare Income Supplement payouts announced in the Budget last week and the progressive wage model, to raise the pay of low-wage workers.

Since the intention to make itemised payslips compulsory was announced three years ago, most employers have started doing so.

Mr Kurt Wee, president of the Association of Small and Medium Enterprises, said that more than 80 per cent of companies his association surveyed are already giving staff monthly itemised payslips.

But companies using older payroll systems or doing payroll processing by hand may still need time to comply, said Singapore National Employers Federation executive director Koh Juan Kiat.

"Some teething problems such as how detailed the item on overtime pay should be, and integrating two salary payment periods into one payslip, are still there," he said.

To help companies adjust to the changes, MOM has an assistance package comprising templates of payslips and key employment terms, free software for generating payslips, funding and consultation services. Details can be found on its website.

Some small businesses still ignorant of new rules on payslips
By Joanna Seow and Samuel Mak, The Straits Times, 1 Apr 2016

Despite changes to the Employment Act kicking in today, requiring companies to provide workers with itemised payslips and key employment terms, some of the smallest businesses are still in the dark.

Out of 10 micro-sized enterprises such as heartland shops or hawker stalls The Straits Times spoke to, four were unaware of the changes, while two that knew said they had yet to make their payslips more detailed.

"Currently I give my employees a payslip every month and get them to sign on it," said Mr Daren Tan, 36, owner of heartland bakery Bread of Taste. "With the changes we will have to issue a more detailed payslip."

Four bosses said they were already issuing itemised payslips. "When you give employees money it is good to have a record. Otherwise... it may give rise to disputes," said chicken rice stall owner Hoo Soo Ten, 71.

Bosses have a one-year grace period to upgrade their payslip processing systems before Ministry of Manpower (MOM) enforcement is stepped up. To help employers get up to speed, guidelines developed by MOM, the National Trades Union Congress and the Singapore National Employers Federation were launched two years ago.

These provided templates of payslips that bosses could customise based on their own needs. Various associations and firms have also developed software to aid small businesses.

Software developer PayrollServe launched its cloud-based payroll software and service in 2013 and has seen over 2,500 firms - mostly small ones - sign up, said PayrollServe director Alice Ong.

United Overseas Bank started a new payroll service last December and has seen the number of inquiries for this service shoot up.

Other payslip-generating systems include SP-Pay, which is a free software developed by Singapore Polytechnic students; ePayslip Generator by the Singapore Chinese Chamber of Commerce and Industry and Singapore Institute of Manufacturing Technology; and GPayroll.

More protection for workers
By Toh Yong Chuan, Manpower Correspondent, The Straits Times, 4 Apr 2016

Two changes to the Employment Act took effect last Friday without fanfare, but their implications are wide-ranging.

From this month, employers must provide workers with their key employment terms, like job scope and working hours, in writing.

They must also issue payslips. Not just a paper stub to show the worker has been paid, but a proper breakdown of items like basic and overtime pay.

On the surface, these moves look easy to implement. Yet it took three years for them to kick in.

When compulsory payslips were announced in March 2013, small firms were worried this would add to costs. To allay concerns, the Ministry of Manpower (MOM) took the unprecedented step of giving out a free payslip-generating software. Also, unusually, MOM said it would take a "light-touch enforcement approach" in the first year, focusing on educating bosses instead of fining them $1,000 for each initial breach and $2,000 for subsequent infractions. This means one more year before the rules take full effect.

Still, the changes ought to bring cheer to workers now, especially those in low-wage sectors like cleaning and security. These workers tend to be lower educated and elderly. They do not have many job options and may not know their rights. They will now be better protected in at least three ways from bosses who may short-change them.

For one thing, employers will no longer be able to avoid making Central Provident Fund contributions by enticing workers to take daily cash payments instead of a monthly salary. Having a paper trail will also help workers when there are disputes. And having to put employment terms in writing and issue payslips will make bosses think twice about exploiting workers. There is a deterrent effect.

The moves are not problem-free. In the casual sector like hawker stalls or family-owned shops, one wonders how bosses might put in writing working hours and basic wages of their family members.

These areas aside, the rules are long overdue. They signal very clearly that the Government is serious about protecting vulnerable low-wage workers.

Issuance of Itemised Pay slips and Key Employment Terms with effect from 1 April 2016

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