Itemised payslips are now compulsory
FIRMS will have to issue itemised payslips to employees from today, as landmark changes to the Employment Act kick in.
They will also need to provide key employment terms, such as working arrangements, main duties and fixed salary deductions, in writing.
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 Manpower Ministry (MOM) reiterated in a press release 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 hard or soft copy format, must detail items such as a worker's basic salary, deductions and the overtime hours worked. These are crucial to ensure 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 (CPF). But workers do not realise they also 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 efforts in recent years to raise the pay of low-wage workers such as the progressive wage model and higher Workfare Income Supplement payouts announced in the Budget last week.
Since the intention to make itemised payslips compulsory was announced three years ago, most firms have started doing so.
Kurt Wee, president of the Association of Small and Medium Enterprises, said over 80 per cent of companies his association surveyed are already giving itemised payslips to their staff on a monthly basis.
But some companies who have been 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 should the item on overtime pay be, integrating two salary payment periods into one payslip, are still there," he added.
To help companies adjust to the changes, MOM has an assistance package comprising templates of payslips and key employment terms, a free software for generating itemised pay-slips, funding and consultation services. Details can be found on the ministry's website.