NWC recommends S$60 wage increment for workers earning up to S$1,100 monthly

SINGAPORE – The National Wages Council (NWC) recommended today (May 29) a monthly wage increment of at least S$60 for workers earning a basic salary of up to S$1,100 monthly – a S$100 increase in the wage threshold from last year.

This is also the third year in a row that the NWC has recommended a minimum pay hike of S$60. In 2012, the council recommended a minimum monthly increment of S$50 – marking the first time since 1984 that it had recommended a minimum quantum of pay rise.

A Ministry of Manpower (MOM) spokesperson said the quantum of S$60 is something that has been deliberated extensively at the NWC. It was based on what the employers and unions feel is a reasonable target that will challenge employers to do more for this group of workers, but is at the same time achievable by a good proportion of companies, added the spokesperson.

Speaking at the press conference held at the MOM headquarters today, NWC chair Peter Seah said the council wanted to focus on low-wage workers given how they are the “most vulnerable group and should continue to benefit from Singapore’s growth”.

The increase in wage threshold to S$1,100 is partly due to the fall in the number of resident employees earning a basic monthly salary of up to S$1,000 since 2012.

“Since the quantitative guidelines were introduced in 2012, the proportion of full-time employed resident employees earning a basic monthly salary of up to S$1,000 is estimated to have decreased from 9.8 per cent in 2012 to 6.8 per cent in 2014,” said NWC in its wage guidelines released today.

Meanwhile, for low-wage workers who earn above S$1,100, the council recommended this group is given an “equitable and reasonable” wage increase and/or a one-off lump sum based on skills and productivity.

The recommendations have been accepted by the Government. The recommendation of a built-in wage increase of at least S$60 for workers earning a basic monthly salary of up to S$1,100 makes it clear that there should be continued efforts to improve wage outcomes for low-wage workers, the MOM said.

More workers could benefit with raised income threshold: Chan Chun Sing

Secretary-general of the National Trades Union Congress (NTUC) Chan Chun Seng said the NWC's recommendations were well received by union leaders. "I am happy that the new NWC Chairman Peter Seah has continued to reinforce a strong tripartite commitment in the recommendations, particularly the effort to do more for our lower waged workers by raising the income threshold to $1100, which means more workers will stand to benefit," he wrote on Facebook.

Also present at the press conference was the assistant secretary-general of the NTUC Cham Hui Fong, who noted that while they were comforted by the drop in the percentage of workers earning less than S$1,000 a month, more needs to be done to help this group.

“The biggest worry we have is that the moment they cross S$1,000 – although there is a qualitative guideline to ensure that we have to pay something that is equitable to them – but the reality is that it is not clearly stated in the guidelines what is equitable,” she said.

“If this group are the workers that are vulnerable and they are indeed doing something to upskill themselves and management is also making efforts to improve the productivity, then I think we ought to ensure that there is a reasonable wage increase for them. Hence, we take the decision, why not we just move S$100 to S$1,100, to really take care of this bigger group of people who are still earning in, certainly, the lower percentile,” added Ms Cham.

Other NWC recommendations include encouraging unions and employers to work towards restructuring employer medical benefits to portable medical benefits to improve the cost-effectiveness of medical expenses.

“With the ageing population and of course with the concerted effort to really push reemployment beyond a certain age, we think it is really useful for us to really review the medical benefits that we have now,” said Ms Cham.

While it is not part of the NWC recommendations, the council also welcomed the idea of employers giving a SG50 gift in cash or in kind in celebration of Singapore’s Jubilee year. For instance, DBS Bank gave all employees ranked vice-president and below a one-time reward of S$1,000 to commemorate SG50 and its market capitalisation hitting S$50 billion.