Uplifting wages: How is government helping employers?

Progressive Wage Credit Scheme, advance notice in play to assist employers

Uplifting wages: How is government helping employers?

The Ministry of Manpower (MOM) has reiterated that it has a credit scheme that will assist employers who are struggling to uplift salaries following the implementation of the Progressive Wage Model across various sectors.

"The government is also doing its part to offset increases in labour costs through the Progressive Wage Credit Scheme (PWCS)," Senior Minister of State for Manpower Zaqy Mohamad said.

Under the scheme, Mohamad said the government will fund up to 75% of wage increases that employers provide to lower-wage workers for five years from 2022 to 2026.

"This includes wage increments given due to Progressive Wage requirements," he said.

Mohamad was answering a question in Parliament on what assistance and interventions can employers receive from MOM as the PWM takes effect for some sectors, including food service, drivers, among others.

Previously, the government also warned employers against misclassifying staff to gig workers to get around their PWM obligations.

Advance notice

Meanwhile, Mohamad also pointed out that wage schedules for affected sectors by the PWM were announced ahead of time to provide clarity and allow renegotiations among parties involved.

For sectors where outsourcing is common, the wage schedules were announced between 2021 and 202, ahead of their six-year implementation from 2023 to 2028, according to the minister.

He added that the schedules are announced in advance "so that service providers and buyers entering into new contracts do so with sufficient information, and those mid-way through existing contracts can discuss whether the contracts need to be renegotiated."

Singapore's PWM aims to "increase wages of workers through upgrading skills and improving productivity," according to MOM's website.

Sectoral tripartite cluster committees, comprised of representatives from the government, unions, service providers, and service buyers in each sector, negotiate the Progressive Wage schedules for each PWM sector.

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