As living costs rise, Singapore employers are urged to offer relief with a one-off sum and pay increases for lower-income workers.
National Wages Council’s Recommendations for 2024
The National Wages Council (NWC) has issued guidelines aimed at helping workers cope with the rising cost of living, recommending employers provide a one-off lump sum payment and a pay raise for lower-wage workers from Dec 1, 2023, to Nov 30, 2024. This is the first time in over a decade that the council has proposed such a payment, emphasizing the need for relief amidst an uncertain economic outlook.
Employers are encouraged to consider larger sums for lower- to middle-income employees, with a focus on those earning up to $2,500 monthly. These employees should receive a pay increase of at least 5.5% to 7.5% in 2024, with the increase tailored based on individual company performance and market outlook.
Focus on Lower-Wage Workers
For lower-wage workers earning the least, the NWC recommends a built-in wage increase of at least $85 to $105, depending on the company’s financial situation. Employers doing well are encouraged to offer the higher percentage of the recommended increase, while those facing uncertain prospects should offer the lower bound.
The NWC stressed the importance of ensuring sustained basic wage growth and flexibility, allowing for variable payments based on company performance and worker contributions. The council reiterated the need for businesses to maintain a flexible wage system amidst ongoing economic challenges.
Wage Growth and Productivity
Despite recent declines in labour productivity, the NWC emphasized that wages should align with long-term productivity gains. Companies facing difficult conditions should continue to invest in upskilling employees to improve business processes and productivity.
The Singapore Ministry of Manpower (MOM) has accepted the recommendations, supporting differentiated wage increases based on each company’s performance. MOM also highlighted the importance of Progressive Wages, ensuring that the pay increases are linked to productivity and skill improvement.
Key Takeaways:
One-off lump sum payment and pay raise for lower-wage workers.
Pay increase recommendations range from 5.5% to 7.5%.
Flexible wage systems and variable payments based on performance.
Focus on productivity growth and upskilling employees.
