Singapore Government accepts Tripartite Workgroup recommendations to uplift wages and well-being of lower-wage workers

29 September 2021

The Singapore Government has accepted all 18 recommendations of the Tripartite Workgroup on Lower-Wage Workers (“Workgroup”) and will work closely with the tripartite partners (that is, the Ministry of Manpower, the National Trades Union Congress and the Singapore National Employers Federation) to implement them. This was announced by the Ministry of Manpower (“MOM”) on 30 August 2021. Some of these initiatives were highlighted by Singapore Prime Minister Lee Hsien Loong in his National Day Rally speech delivered on 29 August 2021.

The Workgroup was formed in October 2020 to ensure wage growth in mandatory Progressive Wage Model (“PWM”) sectors continues to outpace median wage growth, significantly increase the number of lower-wage workers covered by PWMs, and offer progressive wages in occupations not covered by the mandatory PWMs.

After considering the concerns of businesses and workers, the Workgroup made 18 recommendations in three key areas as summarised below.

Refresh Progressive Wage approach and coverage to boost wages to gain ground with median

1.  Expand Sectoral Progressive Wages (“PW”) to retail (from 1 September 2022), food services (from March 2023) and waste management (from 2023).

2.  Extend existing cleaning, security and landscape PWMs to in-house workers from 1 September 2022.

3.  Introduce new Occupational PW to administrators and drivers from 1 March 2023.

4.  Require firms employing foreign workers to pay at least the Local Qualifying Salary (“LQS”) to all local workers from 1 September 2022. This will apply even if the firm has excess foreign worker quota, or the Sectoral or Occupational PW do not apply to the firm’s local workers.

5.  Convert PW and LQS to fair hourly rates for those working part-time or overtime. This will provide firms flexibility to hire locals on different work arrangements without losing foreign worker access, while ensuring fair wages for workers based on their hours worked.

6.  Ensure baseline PW growth for workers at the 20th percentile outpaces median wage growth so that lower-wage workers gain ground with the median.

7.  Maintain the overarching principle that wages should continue to keep pace with productivity growth, but provide scope for wage growth of lower-wage workers to outpace productivity. As lower-wage workers may be in roles with limited scope for productivity improvement, firms should continue to enhance firm-level productivity to better support wage increases for workers.

Leverage institutions to ensure sustained wage growth

8.  The National Wages Council to set annual guidance for PW growth and recommend annual wage growth of Occupational PW.

9.  Firms employing foreign workers to pay at least the relevant Sectoral or Occupational PW to all local workers in applicable job roles.

10.  Leverage the Work Pass system to ensure employers pay PW and LQS for access to foreign workers.

11.  In the long-term, express PW in gross terms, i.e. monthly gross wages including variable components such as allowances, commissions and overtime payments.

Promote whole-of-society support to uplift lower-wage workers

12.  The Government to review the Workfare scheme regularly to ensure lower-wage workers continue to be supported even as PW become more pervasive.

13.  The Government to provide transitional support for employers, with higher support in the initial phase as businesses recover from the impact of Covid-19.

14.  Employers should advance the well-being of lower-wage workers by (i) supporting them to upskill and progress in their careers, (ii) providing them with a safe and healthy work environment, and (iii) providing them with adequate rest areas.

15.  Establish a new Tripartite Standard on Advancing Lower-Wage Workers’ Well-Being to help more firms adopt and implement the specified practices and be publicly recognised for doing so.

16.  Establish a new Progressive Wage Mark (“PW Mark”) to recognise firms that pay PW. This will enable consumers to identify such firms to support lower-wage workers’ wage increases. In addition, the “PW Mark Plus” may be conferred on firms that go the extra mile to uplift lower-wage workers holistically by advancing their well-being.

17.  Public and private sector buyers should require their suppliers to obtain the PW Mark.

18.  Grow the Alliance for Action for Lower-Wage Workers, so that uplifting lower-wage workers is a whole-of-society endeavour.

Reference materials

The press release and the Tripartite Workgroup on Lower-Wage Workers Report are available on the MOM website www.mom.gov.sg.