Amid the pick-up in economic conditions, the National Wages Council (NWC) has recommended that low-wage workers earning a basic monthly salary of up to S$1,300 receive a pay increase of S$50 to S$70. This is higher than last year’s recommendation of S$45 to S$60 for low-wage workers earning up to S$1,200. This is the third time that NWC is proposing a pay hike range and an increase in the basic monthly wage threshold for low-wage workers.
The increase in the wage threshold last year covered more low-wage workers and led to improvements in their wage outcome, NWC said. The proportion of full-time resident employees earning a basic monthly wage of up to S$1,200 has also fallen from an estimated 8.1 per cent in 2016 to 7.7 per cent in 2017. Building on the progress made, the NWC said that it is useful to continue to provide quantitative guidelines for low-wage workers and to further raise the basic wage threshold. But NWC also noted that the adoption rate of its quantitative guidelines for low-wage workers in outsourced work fell from 49 per cent in 2016 to 44 per cent in 2017.
For employers who did not provide wage increases, the top reasons cited were that they were constrained by contractual agreements or were already paying the market rate, it said. NWC urged service providers to adopt the same wage recommendations for outsourced low-wage workers and to factor in wage increases into their bid prices, particularly for the cleaning, security and landscaping sectors.
For companies that have achieved productivity gains in 2017, NWC suggested that they provide an additional one-off special payment of S$300 to S$600 to low-wage workers earning up to S$1,300. This can be paid to the employees in a lump sum or over several payments.
The Ministry of Manpower’s annual report on wage practices released on Wednesday showed that the number of companies that adopted the NWC’s recommendations for low-wage workers rose significantly from 21 per cent in 2016 to 48 per cent in 2017, the highest since 2013. Overall, 62 per cent of establishments with low-wage workers gave their workers a wage increase in 2017, up from 40 per cent in 2016.
Industries such as accommodation and food services, community, social and personal services, and wholesale and retail trade were most proactive in adopting the pay increment recommendation. Industries such as construction, transportation and storage and manufacturing gave less.
Establishments that did not grant wage increases to low-wage workers cited reasons such as poor business and already paying the market rate. There were also some concerns over the impact on business and wage costs, as well as poor employee performance. The NWC guidelines cover the period from Jul 1, 2018 to Jun 30, 2019.