Singaporean Government Accepted National Wages Council (NWC) Guidelines for 2019/2020 With Open Arms
In a recent press release on 30 May 2019, the Singaporean government has welcomed and accepted the National Wages Council (NWC) Guidelines for 2019/2020. The National Wages Council (“NWC”), convened in April and May 2019, has formulated structured wage guidelines for the period from 1 July 2019 to 30 June 2020.
According to the Ministry of Manpower (“MOM”), the Singaporean government accepts the guidelines with open arms – a stronger emphasis on employer-led structured training that, salary growth and more pay for low-income earners.
As such, the government welcomes and backs the NWC’s recommendations for employers to commit the following:
- To provide structured training to their employees in line with current and future business requirements;
- To continue the implementation of productivity initiatives, and strives to achieve better salaries and skills; and
- To set up Company Training Committees and establish the in-house workplace learning capabilities.
The new NWC Guidelines for 2019/2020, that will commence on 1 July 2019 through to 30 June 2020, applies to all employees in unionised and non-unionised firms of both the public and private sector (ranging from professionals, managers, executives, technicians to rank-and-file employees), including workers who have been re-hired.
Key Recommendations of the NWC Guidelines for 2019/2020
1. Wage Recommendations for All Workers
The NWC recommends that employer must factor in employer’s performance, productivity gain as well as employees’ contributions to ensure sustainable and fair salary growth. In other words, all employers with above-the-par productivity improvements and revenues should remunerate their employees with fair salary increments and bonuses – NWC recommends that employers should share these gains with their staff via a one-off payment.
On the other hand, for employers with average business performance can exercise moderate salary increment to reward their staff to keep up with productivity. Employers with below-the-par business performance, however, can exercise salary restraint with its Management leading by example.
2. Wage Recommendations for Low-income Earners
In the new guidelines, the NWC has increased the threshold of basic salary for low-income workers from S$1,300 to S$1,400. In 2018, 7.9% of full-time resident employees took home a basic monthly salary of up to S1, 300, 1.3% lesser if compared with 2017.
In light with the revised basic salary, the NWC has recommended:
- Employers to implement a built-in salary increment mechanism of between S$50 and S$70 to benefit low-wage workers making a basic monthly salary of up to S$1,400.
- Employers to give a reasonable salary increment and/or a one-off lump sum to remunerate low-income workers, based on their skills and productivity.
- Employers, who achieved good business performances in 2018, to offer a one-off remuneration of between S$200 and S$300.
3. Training Recommendations
NWC has iterated that salary growth must be aligned with productivity growth (based on business transformation and workforce up-skilling). Therefore, the NWC has recommended the following:
- All employers to provide structured training for their staff with a well-crafted training plan that
- fulfils their current and future requirements,
- in accordance with industry standards as outlined in the Skills Frameworks, where applicable.
In order to achieve the goal, employers are encouraged to seek the assistance of Singapore National Employers Federation (“SNEF”), Singapore Business Federation (“SBF”), Trade Associations & Chambers (“TACs”) and the unions. On top of that, employers are welcomes to tap on the wide range of SkillsFuture and Adapt & Grow programmes available for their employees’ training.
- Employers to continue the innovation and implementation of productivity initiatives with the following ideas:
- Redesign jobs and equip their employees with the right skills to take on these jobs.
- Equip all employees with emerging skills. Employers should make sure employees are well equipped with skills to mitigate the risk of redundancy and continue to be employable.
- Tap on government schemes such as the Enterprise Development Grant (EDG)
- Unionised companies and NTUC-e2i partners to work with unions to set up Company Training Committees and establish their in-house workplace learning capabilities.
4. Low-Income Earners in Outsourced Working Arrangements
Outsourcing activities have become one of the important elements in business setting to ensure operational efficiency and cost-saving efforts.
On top of the strong support from the Government for best sourcing practices, the NWC has urged other service buyers to do follow suit with the following:
- Embrace the outcome-based outsourcing arrangements with specified service-level requirements rather than manpower.
- Adopt the policy of adjustable contract values (as and when necessary) so that service providers could provide for annual wage adjustments and the Annual Wage Supplement (AWS).
On the other hand, service providers should:
- Consider NWC’s wage recommendations when formulating their bid prices, including the multi-year contracts.
- Incorporate the annual wage adjustments and the AWS for workers into new contracts.
- When offering new employment agreements or renewing the existing agreements, service providers have to engage service buyers to improve the remuneration package of outsourced workers’.
The NWC has recommended that both service buyers and service providers should:
- Be on the same page on the duration of service, experience, and performance of outsourced workers when renewing or making a new offer.
- Avoid the case of alteration of remuneration packages for outsourced workers who perform the same job functions even when there is a change of service providers.
- Provide a proper work environment of low-income worker, e.g. setup proper and reasonable rest areas for outsourced workers.
Recommendations on Progressive Wage Model (“PWM”), Employment of Seniors and Flexible Work Arrangements
The NWC has called on employers to leverage the expertise of the senior workforce, implement the Progressive Wage Model (“PWM”), and adopt the Flexible Work Arrangements. NWC has recommended that employers should consider the option of adopting higher retirement and offer necessary training for senior workers.
In terms of PWM, the NWC backed tripartite efforts in advancing the Government-enforced PWM in three sectors: the cleaning, security and landscape maintenance sectors. Precisely speaking, the NWC supports the idea of scheduled increment of basic salary and the introduction of mandatory PWM bonus of at least two weeks of basic monthly salary (for eligible cleaners and landscape maintenance employees) from 2020.
In order to increase staff retention rate and improve the quality of work, NWC has also urged employers to introduce flexible work arrangements (“FWAs”) to their employees.