Epica Guide Series
A Guide to Employee Recruitment in Singapore
Are you planning to recruit Employees for your Singapore Company. New business owners have lot of questions about it. Refer to these guide to know more about recruiting employees in Singapore.
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Guide to Recruiting Employees in Singapore
Table of Contents
Hiring employees is an important milestone after setting up a Singapore company which involves some serious and important decision-making. The hiring process carries with it some legal and ethical guidelines that must be adhered to by both employers and employees. Most of today's employees are well versed in the Singapore Employment Act and have a clear understanding of their rights and protection under different laws. As an employer, knowledge of the dos and donts of recruiting is equally important when hiring employees.
It is essential to ask yourself the following questions before starting the hiring process:
This guide sheds light on the above-mentioned points like main labour laws, recruiting procedures for local and foreign workers in Singapore, typical management, and recruitment practices. The guide is intended primarily for new companies in Singapore that are looking to recruit employees for the first time. The article lays out a guide which is only for general information and is not intended to replace professional advice.
What is the Employment Act (EA)?
The Singapore Employment Act is the key legislation that sets out certain basic employment terms and conditions. The Employment Act is the all-encompassing statute for Singapore relating to labour and employment issues. It sets out specific regulations regarding the basic terms and conditions of employment, and it also caters to the obligations, tasks and responsibilities of the employers and employees in a Singapore Company.
Implications of Employment Act (EA)
To whom does the Employment Act apply?
Amendment in Erstwhile Employment Act
The Government of Singapore enacted significant changes to the Employment Act (EA) on 1 April 2019. This law affects all the businesses and employees, whether local or foreign who are in a job contract with an employer from Singapore.
The amendments have been designed to improve conditions of employment by expanding the qualification requirements around salary and job grades, resulting in every employee in the private sector now entitled to the rights and protections under the EA.
Core Provision of the Amended Employment Act
Note: The provisions of Part IV do not apply to managers and executives.
To whom the Employment Act is NOT applicable?
The employment act is not applicable to the following as they are covered by other regulations:
Employer must know - Key Features of Employment Act
Following is the tabulated form of the key features of the Employment Act:
Features |
Managers / Executives positions |
Employees earning > 2,600/month |
Employees earning < 2,600/month |
Maximum Working Hours in a Week |
According to Contract Common practice: 40-50 hours |
According to Contract Common practice: 40-50 hours |
44 hours |
Maximum Working Days in a Week |
According to Contract Common practice: 5 days |
According to Contract Common practice: 5 days |
6 days |
Rules Applicable to the Overtime |
According to Contract |
According to Contract |
72 Hours / Month at Max Max Overtime rate up to SGD2,600 Payment is given @ of 1.5x of the basic hourly rate |
Contribution of CPF for Citizens and PR holders of Singapore |
Required | Required | Required |
Yearly Bonus |
According to Contract Normal Practice: Paid an amount equal to one to four month’s salary |
According to Contract Normal Practice: Paid an amount equivalent to one to four month’s salary |
According to Contract |
Yearly Leave - Paid |
As per contract Common practice: 15 days |
As per contract Common practice: 15 days |
1st year – 7 days 2nd year – 8 days 3rd year – 9 days (annual increase up to a max. 14 days) |
Sick Leave - Paid |
According to Contract Common practice: 14 days per annum |
According to Contract Common practice: 14 days per annum |
Out-patient: Five to Fourteen Days (Basing on the period of employment) Hospital Admission: 15-60 days (Basing on the period of employment) |
Maternity Leave – Paid (if eligible) |
16 weeks First 8 weeks are employer payable for first 2 confinements |
16 weeks First 8 weeks are employer payable for first 2 confinements |
16 weeks First 8 weeks are employer payable for first 2 confinements |
Yearly Childcare Leave – Paid (Until the child turns 7) |
6 days First 3 days employer payable |
6 days First 3 days employer payable |
6 days First 3 days employer payable |
Infant care Leave – Unpaid (Until infant turns 2) |
6 days | 6 days | 6 days |
Paid Public Holidays |
11 days | 11 days | 11 days |
Probation Period |
As per contract Common practice: 6 months |
As per contract Common practice: 6 months |
As per contract Common practice: 3-6 months |
Termination Notice Period |
As per contract Common practice: 1-3 months |
As per contract Common practice: 1-3 months |
As per contract Common practice: 1 month |
Retrenchment |
As per contract |
As per contract |
Eligible to: |
Medical Insurance |
As per contract | As per contract | As per contract |
Employers in Singapore – Duties and Obligations
Formalizing Employment Contract
Of all the documents related to the employment of an individual, the employment contract is of vital importance. Because the employment contract lays out the terms and conditions of the job between the hiring authority (employer) and the one being hired (employee). Even if you are able to write the contract on your own, it is best to seek guidance from a lawyer or HR professional who are well versed with such papers. Please note that if the employee is protected by the Employment Act, the contract terms will conform with the minimum requirements set out in the Act.
Key Points that must be included in the Contract
Reporting Employee Earnings
As an employer in Singapore, it is your responsibility to prepare tax forms for all your employees (who have been employed in Singapore) to report their salary/remuneration under the Income Tax Act each year.
Tax issues for Foreign Employees
Tax clearance is required for the foreign employees ceasing to work with a Singapore Employer, leaving on a posting abroad, or leaving Singapore for any period exceeding three months. The employer is responsible for ensuring that said employee has paid all taxes. Also, the employer must notify the tax authority (IRAS) and withhold all payments that are due in the name of the foreign employee from the day he / she notifies the employer about his / her plan to cease employment or when the employer decides to terminate the job or post the employee to a location outside the country. Once an assessment is done by the IRAS, a tax clearance certificate is issued, confirming that the employee has paid all the taxes and there are no outstanding dues against him. After the receipt of the clearance certificate, the employer can release any payment entitled to the employee that was withheld earlier.
What rules are applicable to the Central Provident Fund (CPF) contributions?
To local employees
It is mandatory for an employer to make the CPF payment in the name of all local employees (citizens and PRs) who receive more than S$50 a month. According to the Singapore Law, 16 and 20 per cent are the maximum contribution rates for the employer and employee respectively. The rate may be lower based on certain other factors like the age of the employee and the permanent resident status etc.
For foreign employees
CPF contributions do not apply to foreign employees.
Paying Levies
Government of Singapore collects a Foreign Worker Levy (FWL) for low-skilled and unskilled foreign employees. The foreign labour levy is a mechanism of price control to regulate the demand for foreign workers in Singapore.
Hiring students
Citizens and Singapore PR Holders
Students who are citizens of Singapore or are permanent residents of Singapore can be hired full-time and part-time without any restrictions. If not exempted, all students are entitled to CPF donations. There is no legal need to make CPF contributions if you want to take on students for an internship, as they are only being trained as part of their curriculum in your organization. The common practice is to only pay a monthly allowance for interns.
Foreign Students
Foreign students are not permitted to work in Singapore during term or vacation time unless they are granted a work permit under the Foreign Manpower Employment (Work Pass Exemptions) Notification. In order to employ a foreign student as an intern as part of Industrial attachment program, the employer is required to ask for a Training Work Permit or a Training Employment Pass on his/her behalf. There is no payment levied on the foreign interns as they are only being educated as part of their curriculum in your organisation. The common practice is to only pay a monthly allowance for interns.
Hiring part-time employees and contractual staff
Age restrictions
The legal age to be working in Singapore is 17 years and up. You are, however, permitted to hire children and young people aged 13-16 years. Please note that restrictions are placed on the type of work that children and young people can perform. In Singapore, the retirement age is 62 years.
Hiring Foreign Employees
Given the history of the country in attracting and hiring foreign professionals, the government of Singapore has liberalized the policy for immigration and has also enacted various laws to facilitate the recruitment of foreigners.
Why Singaporean employers recruit foreigners?
Most Singapore businesses hire foreign talent to supplement their local workforce. The reasons for this trend are mentioned below:
Categorisation of Foreign Workforce in Singapore
The foreign workforce is divided into three main groups:
Requirement of Work Permit for Employing and Hiring Foreigners in Singapore
Under the Employment Act, to be able to work in Singapore, a foreigner must have a valid work visa. When you plan to recruit a foreigner, you will have to apply on his / her behalf for a work permit before he / she can begin to work for you. Please note that certain passes of work put a limitation on the number of foreign workers that you can recruit.
Tabulated below are descriptions of the different work passes you'll need to apply for depending on which type of foreign talent you're recruiting.
Pass Type |
Employment Pass |
S Pass |
R Pass (Work Permit) |
Suitable For |
Skilled employees who have a tertiary level of education and corresponding work experience Monthly salary > S$3,600 |
Semi-skilled employees who have diploma level education and corresponding work experience Monthly salary > S$2,300 (2,400 with effect from 1 Jan 2020) |
Unskilled workers with relevant work experience Monthly salary < S$2,000 |
Validity |
Issued for 1-2 years initially Renewable |
Issued for 1-2 years initially Renewable |
Issued for 1-2 years initially Renewable |
Quota System |
No |
Yes 20% of the company’s total workforce |
Yes Variable across industries |
Eligibility for Dependants Pass |
Yes | Yes | No |
Restrictions on Nationality |
No | No | Yes |
Levies |
No | Foreign Worker Levy | Foreign Worker Levy |
General Recruitment Guidelines
Given that Singapore's workforce includes a varied mix of people keeping in view the age, gender, and ethnicity, employers are strongly advised to adopt progressive and fair HR practices, particularly in matters relating to talent recruitment.
Job Advertisements and Employee Hiring Guidelines Under Fair Consideration Framework
The Ministry of Manpower has released specific guidelines on fair employment practices in this regard. The Instructions are summarized as follows:
Recruiting and Hiring Networks – Methods available in Singapore for Recruiting Staff
Some common recruiting networks are listed below, to which most employers resort to when they to do the recruitment and hiring of staff.
Employment agencies / Recruitment companies
Most medium-sized to large firms prefer to partner with headhunters to hire the right candidate. This method is easy, as less time and effort are needed. It is essential to check the cost and policy of each agency (usually the candidate's salary) before finalizing one. In addition to local recruitment companies, several international agencies such as Hudson, Hays, Robert Walters etc. have built a presence in Singapore and cater for a broad base of MNCs.
Newspaper advertisements
The Straits Times: a local publication with the highest circulation is most popular for classified advertisements among recruiters and job seekers alike. When positioning your advertisement, it is vital to consider the advertising rates and your target audience.
Internet websites
There are a number of popular job websites where you can post an ad for your job requirement for a small fee. Such sites are popular for regional positions and are primarily targeted towards the market in Singapore.
Job/Career Fairs
Job fairs in Singapore are becoming increasingly popular and attract more than 400,000 job seekers per year. This avenue gives employers access to a number of potential candidates and the opportunity to conduct interviews on-the-spot. For those seeking to hire talent for skill-based jobs, this is an appropriate option.
Campus Recruitment
Most of Singapore's universities and polytechnics allow employers to conduct campus interviews and recruitment negotiations if they are interested in hiring graduates / post-graduates.
Provision of Itemized Salary Slips
Maintaining Payroll Records of Employees
If you are an employer in Singapore, it is your responsibility to keep a record of all payslips issued to your employees as under:
