Singapore: Itemized Pay Slips and Written KET’s Now Required
Effective April 1, Singapore requires employers to submit itemized pay slips and written key employment terms (KETs) to employees, in addition to keeping detailed employment records.
While many employers will claim they are already compliant, the devil can be in the details. For example, there is a prescriptive list of items that must be included in the pay slip, such as the employee's full name, payment data, basic salary, allowances, additional payments, rate of pay for annual leave, amount of deductions and clear line entries for specific rates of pay (such as whether the employee is paid hourly or subject to overtime). Employers are urged to check that their current pay slips meet the new standards.
In line with many common law countries, Singapore recognizes a contract whether it is agreed in writing or verbally. However, whereas other countries have required an employer to provide an employee a written statement of particulars, Singapore had no requirement until now. As of April 1, all employees are entitled to receive a KET detailing the main terms of employment, namely name of employer, name of employee, job title, duties, start date, duration of employment, hours of work, salary period, allowances, deductions, rate of pay, rate of overtime, bonuses, types of leave, medical benefits, probationary period and termination provisions. For most employers who already issue employment contracts to their employees, it will be a matter of checking that the document incorporates the full list of items required by the KET.
Employers are also now required to keep detailed employment records that include salary records in support of pay slips and personal information, such as the address of the employee, ID details, date of birth, gender, start date of employment (and leave date), records of working hours and annual leave. Records must be kept for at least two years.
Breaches of the rules will result in financial penalties in the first instance. A failure to rectify the breach will escalate the sanction to a criminal offense, which could lead to 12 months imprisonment.
It is important to note that the changes only apply to employees that are covered by the Employment Act. Managers and executives earning in excess of SGD 4500 per month are excluded from the Act and therefore the changes are not applicable to them.
Despite the fact that the changes are effective April 1, the Ministry of Manpower has indicated that it will be operating a period of grace for 12 months during which time it will apply a "light touch" to enforcement.