Warning: HR leaders are at risk of underpayment claims
New research from global payroll provider ADP reveals employees in Singapore rake up some of the highest amounts of unpaid overtime in the world – putting businesses at serious risk of costly underpayment claims.
The annual global survey found that levels of unpaid overtime are on the rise, with workers giving away an average of 9.2 hours each week. The figures are the highest in APAC, with employees in India averaging an alarming 11 hours extra hours weekly. Singaporeans are not far behind, working an average of 9.4 unpaid hours per week, a rise on 7.3 hours pre-pandemic.
What’s worse, one in ten workers clock more than 20 hours of unpaid overtime each week and more than half of employers are now more closely monitoring timekeeping and attendance.
Speaking to HRD, Kylie Baullo, ADP’s VP client services APAC, said businesses may be at risk of reputational and commercial damage if they fail to take the issue seriously. So how can HR leaders avoid breaching the law?
“Firstly, it’s about your employees and the contracts that you have with your employees, understanding how the work is done, and ensuring that you have the right contracts in place with your employees,” Baullo said. “Then, whether it be a small or a large company, it’s about putting systems in place so you can capture and record as much as you possibly can.”
Read more: Singapore most overworked city globally
The pandemic and ongoing lockdowns across the region have altered working patterns for many employees, especially those who are also juggling caring responsibilities. It’s become common for employees to work later or earlier in a way that suits their situation but this trend could be opening businesses up to the risk of underpayment.
“With all of these changes to how work is done, more than ever you need to have simple ways of recording the time spent on tasks,” she said. “I think that’s the clincher. It’s about being organised and having the ability to assess how much more is an employee working compared to what they’re being paid for.”
Under Singapore’s Employment Act, employees should work a maximum of 44 hours per week. At most, the Ministry of Manpower recommends that employers require staff to work no more than 48 hours a week. Any formal requests for additional hours must be mutually agreed upon by the employer and employee. Workers doing manual labour, like those in the construction, shipping or manufacturing sector, as well as shift workers are entitled to paid overtime. However, non-labourers like executives and managers do not have a right to overtime pay. Regardless, all employees protected by the Act are entitled to one rest day per week.
Read more: Is flexible working overrated?
In any case, if an employee files a dispute over underpayments, officials will investigate the claims and decide whether the employer’s requests for overtime work are justifiable. The catch in Singapore is that employers may not be responsible for overtime pay if there’s clear evidence that employees had put in those extra work hours on their own accord – basically if employers did not give instructions to do so.
Peter Hadley, president – Asia Pacific at ADP shared insights into the phenomena of overwork in the region. “There has been widespread disruption to the 9-to-6 working model,” Hadley said. “Workers are now routinely clocking up what amounts to more than a full working day’s worth of unpaid overtime every single week. Many may be going the extra mile due to concerns about their job security, to compensate when colleagues have lost their jobs.
“There are still many questions around the extent to which working from home will remain the norm, for all or part of the week, and what that might mean for productivity. For younger workers especially who will be charting the course of our workforce’s future, there is a need for two-way communication on their unique needs with employers, in order to find the best solution moving forward.”