Singapore's progressive wage model hits major milestone on 1 Sep 2022

A total of 197,000 full-time lower-wage workers are expected to benefit from the new requirements around local qualifying salaries, as well as those in sectors such as retail, in-house cleaning, security, and landscape.

Latest data from Singapore's Ministry of Manpower (MOM) shows that as of 1 September 2022, 197,000 full-time lower-wage workers in the nation will benefit from:

• The new Local Qualifying Salary (LQS) requirement,
• Introduction of the Progressive Wage Model (PWM) for retail workers, as well as for in-house cleaners, security officers and landscape workers.

If we include benefits accrued to workers in the cleaning, security, landscape, and lift & escalator sectors, a total of 221,000 full-time lower-wage workers will benefit from these progressive wage moves.

For the purpose of the PWM, lower-wage workers refers to full-time resident employees earning a gross monthly income from work [excluding employer Central Provident Fund (CPF) contributions] up to and including the 20^th percentile income level of full-time employed residents (excluding employer CPF contributions), which in June 2021 amounted to S$2,200 in June 2021.

This marks a major milestone for the initiative that has been led by the Tripartite Workgroup on Lower-Wage Workers.

Effective 1 September 2022, employers in Singapore are reminded of the following changes: 

1. Firms that employ foreign workers must pay all their full-time local workers at least the LQS of $1,400.
   1. A total of 159,000 full-time lower-wage workers who are not in PWM sectors will benefit from this new LQS requirement, and be assured that their wages will not fall below S$1,400.
   2. Part-time local workers will also benefit from this new LQS requirement, as they will need to be paid at least S$9 in gross wages per hour.
2. The Retail PWM will be implemented to raise wages, spur training, and improve the productivity of full-time lower-wage retail workers.
   1. About 19,000 full-time retail workers will benefit, with the entry-level PWM wage growing 18% over a three-year period.
3. The PWM for Cleaning, Security and Landscape sectors will be extended to encompass in-house workers. Currently, the PWMs for these sectors only apply to outsourced workers.
   1. The extension of these PWMs to cover in-house workers will mean that workers who undertake the same job roles as outsourced workers, such as those employed in-house by hotels, facility management firms, food services firms and other businesses, must be paid at least the PWM wage corresponding to their respective job roles.
   2. This move will benefit about 19,000 full-time lower-wage workers.

How to identify which roles are covered by PWM

At this stage, MOM requires employers to assess if their workers are performing a job role covered by a PWM. Workers will be considered as undertaking a PWM job role if they spend majority (i.e. more than 50%) of their time performing the role described for that PWM job level.

Employers can find out more about the PWM job descriptions here. They should update and submit their workers’ PWM job roles, if any, through MOM’s Occupational Employment Dataset (OED) portal.

As part of the rollout, Singapore National Employers Federation (SNEF) urges employers to press on with productivity improvements to ensure that the wage increases are sustainable through measures such as:

• Redesigning and enhancing the value of existing lower-wage jobs,
• Reducing reliance on manpower, in particular foreign manpower, 
• Upskilling workers to take on the higher value-added jobs.

Among the next few milestones in the PWM journey, employers can look forward to:

• The Progressive Wage Mark, which recognises eligible firms that pay Progressive Wages, to be launched by end 2022.
• More lower-wage workers will be able to benefit from the Food Services PWM and Occupational Progressive Wage which will be implemented from March 2023.  

Image / Shutterstock

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