Bosses May Not Get Wage Subsidies For Contract Workers
The Business Times reported industry leaders’ calls, including 3E Accounting director Lawrence Chai, for employment agencies to pass on wage subsidy benefits from the Jobs Support Scheme to customers.
From mid-April onwards, pay-outs valued at $7 billion from the Singapore Government’s $18 billion Budget initiative to help save local jobs have been progressively credited to firms. Because these wage subsidies are credited to firms that make the Central Provident Fund (CPF) contributions on employee wages, employment agencies that pay outsourced workers directly would be eligible to collect the subsidies, rather than the employers who hire these contract workers.
Contract Workers Through Service Contract
3E Accounting director Lawrence Chai explains that these placement agencies provide employers with contract workers through a service contract. Lawrence suggested that during the circuit breaker period, placement agencies can help their customers by adjusting their service fee to take into account the Job Support Scheme wage subsidy. Passing on the savings in full will reduce the likelihood that any employer may choose to exercise the termination clause in the service contract. It is a win-win arrangement for everyone, the employer is able to save on reduced overheads, the placement agency receives the full Jobs Support Scheme pay-out and the contract worker keeps his or her job.
Several industry leaders from Kurt Wee, President of the Association of Small and Medium Enterprises (ASME), to Singapore Business Federation (SBF) Chief Executive Ho Meng Kit and Singapore National Employers Federation (SNEF) Executive Director Koh Juan Kiat are encouraging employment agencies to pass the wage subsidies on to customers, even though they do not need to do so. This way, agencies will be able to retain their customers, who then help keep the jobs of their contract workers.