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Changes to Employment Act effective April 2016
Posted on Jul 11, 2016

The requirements for employers to issue itemised payslips and written key employment terms (KETs) to employees covered under the Employment Act (EA) as well as maintain detailed employment records of such employees came into effect on 1 April 2016.

To ensure compliance with the new rules, employers who have yet to do so must review their employment documents, payslip forms and employment records.

Non-compliance can result in the Ministry of Manpower (MOM) issuing an order to the employer to rectify the breach, or pay administrative penalties of $100 to $200 per employee or occurrence, depending on the type of breach.

Failure to comply with this order will constitute a criminal offence, which attracts a fine of up to $5,000. Officers of the company who permitted or willingly allowed the company's failure to comply with the order, or who failed to take proper care to comply with the order, may also be personally liable for a fine of up to $5,000 and/or jail term of up to 6 months.

The MOM has stated that it will give employers a one-year grace period, during which it will adopt a “light-touch” enforcement approach.

In brief, the new requirements are as follows:

Itemised Payslips

Employers are required to issue itemised payslips to employees covered under the EA at least once a month, together with payment to the employee, or within 3 working days of salary payment. The payslips can be in soft or hard copy formats (including handwritten), and must include details such as payments and deductions per salary period, as well as overtime pay, if applicable.

Employers must keep a record of all payslips issued for the latest 2 years. For employees that have left the company, employers should keep the last 2 years’ records for a year after the employee leaves employment.

Written Key Employment Terms (KETs)

Employers are required to issue KETs in writing to employees who are hired on or after 1 April 2016 and who will be employed for a continuous period of 14 days or more. KETs must include details such as the leave entitlements and working arrangements (daily working hours, number of working days per week and rest day, if applicable). The KETs must be issued within 14 days from the start of employment.

Maintaining Detailed Employment Records

Employers must maintain detailed employment records for each employee covered under the EA. These include salary records, with the same information as required for the employee's itemised payslips; and employee records, with information such as the employee's address, NRIC number (work pass number and expiry date for foreign workers), date of birth, start date of employment (and date of termination, if applicable), working hours and public holidays and leave taken.

Learn more about the new requirements at our Payroll Administration and Drafting HR Policies, Procedures & Employment Contracts workshops.