Comprehensive Guide to Singapore Employment Act

A Comprehensive Guide to Singapore Employment Act

If you are going to start your operations and recruit your employees in Singapore, you must understand the country’s labor laws. It is also important to study the general practices that apply to employment contracts, wages, and benefits when hiring employees in the country. This article summarizes the basic legal requirements that Singapore companies must follow when hiring, managing, and firing employees.


About Singapore Employment Act

The Employment Act is Singapore’s primary employment law. It governs the basic terms and conditions of work for employees. All employees (whether foreign or local) are covered by the Employment Act, except for seafarers, domestic workers, and statutory board employees or civil servants. This means that employment contracts between employers and applicable employees would need to meet the minimum standards prescribed under the Employment Act.


Who Does the Employment Act Apply to?

The Employment Act protects employees if they work under any of the following terms.

  • Full-time
  • Part-time
  • Temporary
  • Contract

Note that an employee who works less than 35 hours a week is considered a part-time worker and is covered by the Employment of Part-Time Employees Regulations.

An employee is also protected by law regardless of how they are paid. They can receive their salaries on the following basis:

  • Hourly
  • Daily
  • Monthly
  • Piece-rated


Who is Not Covered by the Act?

The Act does not cover the following categories of employees.

  • Seafarers;
  • Domestic workers;
  • *Statutory board employees or civil servants.

*Statutory boards are certain autonomous Government agencies, such as Accounting and Corporate Regulatory Authority (ACRA), Monetary Authority of Singapore (MAS), etc.


  • If the Act does not cover you, your terms and conditions of employment will be according to your employment contract.
  • Term contract employees are a small but important part of the company’s workforce. Employers are encouraged to adopt Tripartite Advisory on Employment of Term Contract Employees.


Part IV of the Employment Act

Part IV of the Act regulates rights regarding:

  • Regular hours of work;
  • Payment for overtime work;
  • Rest days.

These regulations only apply to employees who are considered to have a lower level of protection in their work. This includes the following categories of workers:

  • Workers (doing manual labor) earn a basic monthly salary of not more than S$4,500, and
  • All non-employees who are paid a base monthly salary of not more than S$2,600.


Managers & Executives

In general, managers and executives are employees with executive and supervisor functions.

Their duties and authorities may include one or all of the following:

  • Make decisions on issues such as hiring, discipline, layoffs, performance appraisals, and awards.
  • Create company strategies and policies.
  • Manage and run a business.

This category also includes professionals with higher education and specific knowledge or skills; or those with similar job requirements to managers and executives (e.g., hired accountants, practitioners, dentists, etc.).

Starting April 1, 2019, managers and executives are covered under the Core Provisions but are exempt from additional protections under Part IV, covering hours of work, rest days, and overtime pay. The law assumes that their work is based on results rather than time; in other words, their work is self-directed, and they are measured by the results of their work and not only by the time they spend working.


2019 Amendments to the Act

In 2019, Singapore passed labor law reforms that resulted in amendments to the Act. Among other changes, these reforms expanded the group of protected employees. The main changes are as follows:

  • The core provisions were expanded to cover all managers and executives;
  • The salary cap for non-workers to qualify for Part IV was increased from $2,500 to $2,600;
  • False dismissal claims are now heard by the Employment Claims Tribunals (ECT) instead of the Minister of Manpower (MOM);
  • Medical certificates from all registered doctors and dentists are now recognized for paid sick leave.


You may want to read an article similar to this:

A Guide to Hiring Employees for Every Business in Singapore


The Importance of Employment Contract

Employment contracts are also known as employment agreements, appointment letters, offer letters, etc. These are agreements between employees and employers that establish the terms and conditions of employment. It is advisable to have a written employment contract in Singapore. Typically, only senior management employees can negotiate their employment contracts. Violation of the employment contract by either the employee or the employer is considered a breach of contract. Most employment contracts include several important clauses such as:

  • Full name of employer and employee;
  • Job title, main duties, and responsibilities;
  • Start date of employment;
  • Duration of employment;
  • Working arrangements (i.e., working hours and rest days);
  • Salary period;
  • Basic salary, fixed allowances, and fixed deductions;
  • Overtime payment period (if applicable) and overtime rate of pay (if applicable);
  • Other salary-related components, such as bonuses and incentives;
  • Types of leave (annual, outpatient, hospitalization, maternity, childcare, etc.);
  • Other medical benefits, such as insurance, medical, and dental;
  • Probation period;
  • Place of work (optional).

The terms and conditions of the employment contract must not be less than those stipulated in the Employment Act. Biz Atom can help you develop a model employment contract designed to comply with the Act’s provisions.


Statutory & Common Practices

The following are general employment regulations that every organization and company in Singapore must adhere to.


Working Age

The legal age to work in Singapore is 17 years and over. You are permitted to employ children and youth from 13 to 16 years of age, but be aware of the restrictions on the types of work children and young people may perform. For example, companies cannot hire workers under 16 in any workplace with harmful working conditions. 

The retirement age in Singapore is 62. Employees who reach retirement age can be rehired up to the age of 65. However, only Singapore citizens and permanent residents can return to work after 62.


Salary & Bonus

Singapore law does not stipulate the minimum salary for every employee. In other words, there is no minimum and negotiable salary requirement between the employer and the employee. However, wages must be paid out at least once a month within seven days after the end of the pay period. Overtime payments, if applicable, must be paid within 14 days of the specified pay period. There are no bonus payment requirements under the Employment Act.

An employee’s salary depends on their position and skills. An annual bonus equivalent to a minimum wage of 1 month, commonly known as the 13th-month payment, has become a common practice in Singapore. The exact amount of the annual bonus may vary from employee to employee according to company policy and will usually be linked to employee performance and company performance. The details of the annual bonus policy will usually be specified in the employment contract. It is not uncommon to see employees in Singapore receive a yearly bonus of 2-3 times their monthly salary during good economic times.


Hours of Work & Overtime

Hours of Work & overtime are regulated under the Employment Act only for employees who earn under S$2,600 per month. Employees covered by Act are entitled to work no more than 44 hours per week.

MOM has strict laws regarding working hours and overtime working conditions:

  • Employees are entitled to work no more than 8 hours per day or 44 hours per week;
  • Employees cannot work more than 6 hours without taking a break;
  • Including overtime work, employees may not work more than 12 hours per day except in certain circumstances, including but not limited to actual or threatened accidents, work essential to national defense or security, or unforeseen circumstances that cause work to be interrupted;
  • Shift workers are not allowed to work more than 12 hours per day under any circumstances;
  • Employees are entitled to 1 rest day (considered a non-working day from midnight to midnight) per week and not considered a paid day; and
  • The longest possible interval between 2 rest days is 12 days.

For employees who earn above S$2,600 per month, the provisions of the Employment Act above are not applicable and are freely determined by the agreement between the employee and the employer. As a general rule in Singapore, office employees work Monday to Friday, 9 am to 6 pm or 7 pm, depending on industry and company policies. It is not uncommon for Singaporean employees to work 9-10 hours during weekdays and half days on Saturday.


Paid Sick Leave

The number of paid sick leave days that employees are entitled to depends on the length of their service. As a rule, employees must have worked for at least three months to get paid outpatient sick leave and at least six months to get the full entitlement. Between three and six months, entitlements can be prorated as follows:

  • If the employee has worked for at least six months at the company, they are entitled to 14 days of sick leave per year and 60 days of inpatient leave (including 14 days).
  • If the employee has worked for at least five months but less than six months for the company, they are entitled to 11 days of sick leave per year and 45 days of inpatient leave (including 11 days).
  • If the employee has worked for at least four months but less than five months for the company, they are entitled to eight days of sick leave per year and 30 days of inpatient leave (including eight days).
  • If the employee has worked for at least three months but less than four months for the company, they are entitled to five days of sick leave per year and 15 days of inpatient leave (including five days).


  • Employees must present a medical certificate from the company doctor (if appointed), a government doctor, or a doctor from an approved hospital.
  • The benefits of sick leave for all company employees in Singapore are generally under the minimum requirements of the Act above.


Paid Annual Leave

Under the Employment Act, employees are entitled to paid annual leave if they have worked with the same employers for at least three months. The length of annual paid leave depends on how many years of service the employee has worked with the company.

  • The annual leave is subject to a minimum of seven days during the first year and one extra day for each additional service year.
  • Annual leave taken even on half a working day is considered one day leave unless stated otherwise in the work contract. 
  • In the case of dismissal for misconduct, unauthorized absence from work for more than 20% of the working days in a month, or unused leave within 12 months of each continuous work year, the employee’s annual leave will be forfeited unless specified otherwise in the contract.


Paid Public Holidays

Singapore employees are entitled to 11 paid public holidays a year following the Act. If the worker is required to work on a public holiday, the employer should pay an extra day’s salary or grant them a day off in lieu. If specified in the agreement, the employer can substitute the public holiday for another day. If the public holiday falls on any rest days, the next working day is considered a paid holiday.


Rest Days

Singapore employers must provide at least one day of rest per week consisting of one full day (midnight to midnight). Rest days are different from paid leave days. The rest day can be a continuous 30 hour period for shift workers.


Health Insurance

There is no legal requirement to provide private health insurance benefits to employees in Singapore under the Employment Act. The government provides professional workers who are Singapore citizens or permanent residents low-cost medical insurance called Medishield – a basic tier of insurance coverage for all Singaporeans.

As part of the employee’s pension fund contribution, a portion of the contribution is automatically allocated to the company’s Medisave account. Medishield’s insurance scheme helps Medisave account holders and their dependents cover medical expenses during old age or severe illness. Medishield premiums are deducted from Medisave accounts.

In terms of health insurance benefits, it depends on the company. In Singapore, most large companies offer additional private health insurance benefits to their employees. Conversely, small companies do not provide such advantages. To provide health benefits higher than those provided under the basic Medshield scheme and provide health insurance benefits to Employment Pass holders, companies may wish to offer private health insurance benefits through one of the many private insurers in Singapore.


Central Provident Fund (CPF) Contributions

CPF is a mandatory retirement savings scheme for Singapore citizens and permanent residents (Singaporean employees). Both employees and employers are required to make monthly CPF contributions.

Employers are also responsible for sending monthly payments no later than the 14th of the following month. The employee’s portion is then deducted from the salary. The maximum CPF contribution rates for employers and employees are 17% and 20%, respectively, and can be lower depending on certain factors such as employees’ age, permanent resident status, etc. There is no CPF contribution for foreign employees who hold work permits or work permits in Singapore.


Maternity and Childcare Leave

Female employees who have worked for more than three months may be entitled to paid maternity leave benefits. Eligible female employees are entitled to a total of 16 weeks of leave. Companies are prohibited from laying off employees during maternity leave. 

Companies must also pay full maternity leave if notification of dismissal is given without sufficient reason within three months of the employee’s confinement. Apart from maternity leave, eligible female employees are entitled to parental leave of six days per year if they have worked for the company for more than three months and are parents of children under seven years of age.


Employment Termination

Either employers or employees can end the employment relationship by terminating the service contract. Termination can occur because:

  • The employee resigns;
  • The employer lays off the employee; or
  • Contract terms have expired.

Both parties must follow the terms and conditions of termination as stated in the contract. If this procedure is not specified, the Employment Act provisions shall apply.

Below are the basic Employment Act requirements for employment termination:

  • The employee must notify the employer in advance through a written statement. The employee can also use annual leave to offset the notification period.
  • If the employee decides to quit without notification, they must pay compensation in lieu of notice.
  • The employer isn’t required to provide reasons for termination of employment as long as they have given due notice.
  • If the termination of employment is due to misconduct, the employer must investigate before taking any disciplinary action. If the employee believes that they have been illegally terminated, they can file a false dismissal claim with the Tripartite Alliance for Dispute Management (TADM).

The length of the notification period must be the same for both the employer and the employee. If the employment contract does not specify this period, it will depend on the length of employment as follows.

Length of Service Notice Period
< 26 weeks 1 day
26 weeks to < 2 years 1 week
2 years to < 5 years 2 weeks
5 years or more 4 weeks



There are many cases in which companies are forced to terminate employees to make savings to reduce cash outflows or expenses or shift focus on becoming more financially capable. While there are several other ways (such as stopping hiring, cutting wages, reducing benefits, etc.) to implement the retrenchment process, most employers use the most common way to reduce costs by laying off their employees.

According to the Employment Act, the following general rules apply to employees who earn less than S$2,600 per month:

  • The company must pay all salaries and benefits due to employees’ last day of work.
  • The duration of notice must follow the employment contract.
  • The employee who has worked for at least three years must be given deductible allowances. The Act does not specify the nature or amount of these allowances. Therefore, the employee and the employer should make an agreement regarding the allowances.
  • The employee who has worked for less than three years is not entitled to deduction benefits under the Act.

As retrenchment has negative implications for the workforce, including loss of skills, energy, morale, commitment, deterioration in physical and mental health resulting from employees’ physical and emotional withdrawal, MOM advises employers to undertake retrenchment exercises responsibly.


Education & Training

There is no obligation for companies to provide education and training allowances to their employees. Even so, MOM encourages employers to offer opportunities for their employees to receive training, improve job competencies, and increase the possibility of career advancement. The Singapore government also has various schemes to cover the costs of training and skills upgrading partially.



One of the mechanisms used by the Singapore authorities to protect employee rights under the law is the punishment imposed for the wrongdoing of employers. If a company fails to comply with the Act’s provisions, it could be fined S$5,000 or up to six months imprisonment for the manager found guilty, or both, for each offense. For subsequent offenses, penalties go up to $10,000 or imprisonment to one year, or both.

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