National Wages Council unveils new category amid Singapore's 'K-shaped economy'
Singapore's National Wages Council (NWC) has introduced a new category for unprofitable employers in its latest wage guidelines for lower-wage workers (LWWs), allowing them to give smaller pay rises while still requiring a minimum increment.
Under the NWC 2026/2027 Guidelines, which cover the period from 1 December 2026 to 30 November 2027, employers that have not done well and are unprofitable should give their LWWs a built-in wage increase of at least $120.
Citing uneven growth across key LWW hiring sectors, the council said it acknowledges that there is a subset of employers that did not do well and are unprofitable.
"The NWC has therefore created a new category for such firms that balances continued wage growth for LWWs with their greater financial constraints," it said.
Establishments are classified as unprofitable if their total expenses exceed their total income, including operating and non-operating income, according to the guidelines.
By comparison, employers that have not done well but remain profitable should provide a built-in wage increase at the lower end of six to eight per cent of gross monthly wage, or at least $120, whichever is higher.
Regardless of profitability, firms covered by sectoral or occupational Progressive Wage Models must still comply with the applicable wage requirements, the NWC added.
'K-shaped economy'
The Singapore National Employers Federation (SNEF) described the new category as "a key change" this year.
"This fourth category recognises the K-shaped economy and provides greater flexibility to firms facing genuine financial constraints, while ensuring that their lower-wage workers continue to receive a meaningful wage increment of at least $120," SNEF said in a statement.
SNEF president Kuah Boon Wee noted that business performance and outlook vary significantly across sectors.
"Employers that have done well should reward their employees and share the gains from improved performance and productivity. At the same time, NWC recognises that some businesses are unprofitable and have limited capacity to raise wages for lower wage workers and therefore recommends a lower quantum of $120 built-in wage increase for their workers," Kuah said.
The Government, which accepted the guidelines on 19 October, also said that "uneven business conditions and continued uncertainty in the economic outlook ahead warrant flexibility in wage adjustments."
Employers urged to take 'positive-leaning' approach
Despite the added flexibility, the NWC encouraged employers "to take a positive-leaning approach and reward employees with wage increases that are fair and sustainable."
This is "with a view to supporting real wage growth and sharing the profits and gains from labour productivity improvements," the council said.
The guidelines come as Singapore's economy grew six per cent year-on-year in the first three quarters of 2026, based on advance estimates, while overall labour productivity rose 3.8% in the first half.
For LWWs earning a gross monthly wage of up to $2,800, employers that have done well and have positive business prospects should provide a built-in wage increase at the higher end of six to eight per cent, or at least $135 to $170, whichever is higher.
Those that have done well but face uncertain prospects should give an increase around the middle of the same percentage range, or at least $135 to $170, whichever is higher.
SNEF noted that these quantitative recommendations "should not be regarded as an across-the-board wage benchmark for the broader workforce."
To help employers sustain the increases, the Government said it recently extended the Progressive Wage Credit Scheme until the end of 2028.
