Do late payments always lead to legal trouble?

Over 15,000 salary claims were filed from 2017 to 2018, says the Ministry of Manpower

Do late payments always lead to legal trouble?

Late or non-payment of salaries are chargeable offences in Singapore.

According to the Ministry of Manpower (MOM), salaries must be paid no later than seven days after the end of the salary period. Overtime pay must be paid within 14 days. For workers covered by the Employment Act, employers must pay the agreed salary at least once a month.

Unpaid salaries are such a touchy issue that employees are advised to immediately file a police report if they were asked to sign salary vouchers without receiving their salary.

For both late or missed payments, employees have a right to file their claims at the Tripartite Alliance for Dispute Management (TADM), where it’s investigated and put through the mediation process, before it’s decided whether further legal proceedings are necessary.

READ MORE: Can you legally give staff a pay cut?

According to TADM, there were over 15,000 salary claims filed from April 2017 to December 2018.

Two-thirds of the claims were either resolved through private payment settlements or court ordered agreements.

The remaining one-third have either led to longer court battles under the Employment Claims Tribunal or were withdrawn by employees for being invalid claims.

MOM also found that initial claims “are not always accurate or valid”, which is why investigations are necessary. Despite this, a "vast majority" of the settlements have been close or same as the amounts claimed, said Manpower Minister Josephine Teo.

“During mediation, TADM mediators will work with the parties involved to verify the actual amount of salary arrears,” Teo said. “Claimants may settle for less if the employer is in genuine financial difficulty.”

Even though MOM states that employees with valid claims “need not be afraid” and can easily file their claims online, the mediation process allows you and your staff to reach a mutually agreeable settlement.

The process takes into consideration the situation, for example whether the company is facing financial difficulties or ceasing operations – and aims to make clear whether the regular payment schedule can be resumed.

Once a settlement agreement has been reached, TADM will actively monitor payment by calling the claimants within three working days of the scheduled payment date.

However, Teo said that sometimes the claimant is not contactable or cannot remember when he/she was paid.

“More importantly, when a claimant reports to TADM that they did not receive any payment after the agreed payment date, TADM will immediately engage the employer concerned and remind the employer to pay up,” she said.

READ MORE: Employers punished over unresolved salary claims

For more serious cases of failed payments, MOM might follow up to enforce the settlement, including suspension of work pass privileges, or worse, prosecution.

If mediation fails and the case goes on to the Claims Tribunals, employers who don’t show up in court can face warnings and/or fines.

Repeated offenders who “purposely evade” their responsibilities will face stronger punishment, said MOM.

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