Heavy Penalties for Late or Non-payment for Employee Salary in Singapore

Singapore is a country that focuses much on human resources for its economical growth while the country's itself does not have much of natural resources to boost the economy. As such, the Singapore's government has taken serious measures to protect the local labour workforce, ensuring that they are being protected by unfair practices engaged by companies.

A law was enacted in 1968 called The Employment Act by one of the ministries, Ministry of Manpower (MOM) to ensure that reasonable employment standards is practice throughout the industry while still helping businesses' to achieve competitiveness in the market.

First time offender will be liable to a fine between S$3,000.00 and S$15,000.00 and/or 6 months' jail term while a subsequent offence will be liable to a fine between S$6,000.00 and S$30,000.00 and/or 12 months' jail term.

One of the protection was the payment of salary to the employees are to be on time and without unreasonable deductions of the salary to be make by the employers. Their main aim is to ensure that individuals such as directors or partners of the companies are made liable for the offences, whom has failed to exercise reasonable supervision or negligence of their part.

As stipulated under the Employment Act the payment of salary to the employees shall be:

• Paid before the expiry of the 7th day after the last day of salary period
• Additional payments for overtime work shall be paid not later than 14 days after the last day of salary period
• Salary due to an employee on completion of his contract of service upon completion of the contract.
• Any employee dismissed by the company to be paid on the day of dismissal or within 3 days of the dismissal (excluding rest day or public holidays)

The maximum composition fine for employers has been increased from the previous S$1,000.00 to S$5,000.00.

Penalties has been imposed for flouting of the late or non-payment for employee salary while an revision has been made much recently for heavier penalties for the non-compliance of the Employment Act. Government inspectors are also granted the power to arrest any person whom he believes to be guilty of failure to pay the salary and allowed to enter and workplace to conducts checks. Though the law, employers are still able to rebut the presumption by proving evidence that he has exercised reasonable supervision or oversight to avoid penalties by the MOM.

Case Studies

Five Companies in the construction sector are charged for a series of employment-related offences, including late salary payments and workers exceeding lawful overtime hours. In a statement by MOM, JK Integrated, Ng Brother Scaffolding, Shanghai Tunnel Engineering, Shanghai Tunnel Engineering (Singapore) and Straits Construction (Singapore) where charged in the State Courts for failure to comply with Employment Act, each firm facing between 26 to 47 charges each.

Source: ChannelNewsAsia, 5th June 2014.

Article updated on 10th June 2014