A Guide To Hiring Locals and Permanent Residents In Singapore.

January 11, 2021
|In Business Advisory and Support
|By Kevin Yeo

This article serves to give companies looking to hire local and/or permanent resident employees a better understanding on what to take note during the hiring process.

UNDERSTANDING PAY STRUCTURE IN SINGAPORE

Companies generally have no hiring quota restrictions when they employ locals and/or singapore permanent residents. It is important to note that employers are required to pay social security for the employee. This is known as central provident fund a.k.a CPF. CPF is payable by the 14th of every month for the preceding month of employment.

For hiring a Singaporean with a gross fixed salary of $2500, here is the payment breakdown:

  • Employee take home pay – 80% of $2500
  • Employee’s mandatory contribution to CPF – 20% of $2500
  • Employer’s mandatory contribution to CPF – 17% of $2500
  • Employer’s mandatory contribution to SDL – 0.25% of $2500

Thus, when hiring a local or PR with a fixed monthly salary of $2500, the total outlay for the employer is $2,931.25.

If the employee is required to travel and or entertain in their field of work, such expenses may also be claimable. This will be subjected to the terms of employment.

LEAVE AND MEDICAL BENEFITS

For a full time office employee, the working hours are typically Mondays to Fridays, 9am to 6pm. This may vary however depending on the agreement between both parties.

There are 11 public holidays in Singapore whereby if the employee is required to work on those days, a off day in lieu will be given.

A typical employment contract will provide annual paid leave of between 7 to 21 days. You can consider starting with 7-14 days and increase them as the employee stays on in subsequent years. Leaves not utilised may be carried over to the following year depending on what is agreed on the employment contract.

There is also paid medical leaves. Employee must first obtain a medical certificate from the doctor certifying they are unfit for work before claiming paid medical leaves. They also ought to inform employer within 48 hours of their absence. The number of paid medical leaves range from 5 to a maximum of 14 days. (This is in tandem with the number of months employed).

If the doctor deem the employee necessary to be hospitalised, this will be offset from paid hospitalisation leave. Paid hospitalisation leave may be given up to 60 days per calendar year.

For mothers giving birth, they are also entitled for up to 16 weeks of paid maternal leaves. (Subject to eligibility criteria)

Last but not least, some employment contract may also provide for compassionate leave. This is additional benefit and is not mandatory. If not given as per contract, the employee may apply for unpaid leave for special circumstances.

TERMINATION OF EMPLOYMENT

The employee will be typically placed on probation for 3 to 6 months. During probation, if stipulated in contract, either party may end the employment relationship with immediate effect.

After probation period, it is typical for the employer to give at least 1 month notice if they are to terminate the employee’s service with the company. Salary due to the employee is payable during this 1 month notice period.

Ready To Hire A Talent Today?

Companies can list their job offer on many online job portals. Some examples are the mycareersfuture.gov.sg which is a government initiative or other major private portals such as JobStreet.com.sg and jobscentral.com.sg.

The job description should be as detailed as possible and it is highly suggested that the pay offered be in line with market. Doing so will help the company attract the right talent required.

Alternatively the company can consider outsourcing the hiring process to a professional 3rd party. It is important to ensure the 3rd party holds a valid employment agency license in Singapore. An experienced employment agency will have an extensive talent database. They will also be able to assist in the crafting of the job description, shortlisting of suitable applicants and  in the successful placement of the selected talent.

Get in touch with us today if your company is looking for a reliable employment agency in Singapore to help with the hiring process!

 

Download the Telegram app and follow us for the latest updates: https://t.me/sgcompanyservices