Singapore: Important changes to administrative requirements for employers and Central Provident Fund contributions

Many significant changes to the employment landscape were announced in 2015 and are due to take effect this year.

From 1 April 2016, the Employment (Amendment) Act 2015 will require employers to:

• issue itemised payslips to all employees;
• provide employees with written Key Employment Terms; and
• keep detailed employment records for each employee.

These requirements apply to all employees who fall within the scope of the Employment Act, which generally encompasses non-managerial and non-executive employees, and any employees in managerial or executive positions who earn SGD 4,500 per month or less.

A failure to fulfil the new requirements is likely to be treated as a "civil breach" resulting in an order to rectify the breach and potential liability of up to SGD 1,000 for a first contravention and SGD 2,000 for a second or subsequent contravention. Employers are advised to implement procedures for payslips, key employment terms and record keeping as soon as possible.

In addition, from 1 January 2016 the majority of the changes to the Central Provident Fund regime announced in the 2015 Budget have come into effect. These mandatory changes aim to enhance the CPF for employees, particularly older workers, and as a result may place a greater financial burden on employers.

In summary, changes that have taken effect include:

• an increase in the CPF Salary Ceiling by SGD 1,000 to SGD 6,000;
• increased employer and employee contribution rates for workers aged between 50 and 65;
• an enhanced Temporary Employment Credit regime; and
• new Special Employment Credit incentives.

Further details can be found here.