The Ministry of Manpower (MOM) of Singapore has formed a new rule regarding the issue of pay slips to the employees of SMEs based in Singapore. The government has made it mandatory to generate pay slips for all employees working in an organization. This makes sure all the employee data including the salary details are well-maintained which can be accessed by the authorized people anytime. This further gives a clear report to the government regarding the number of employees in an organization, their salary details and more importantly the amount the organization has to remit to the government as their contribution to Provident Fund (CPF). The Payroll software used in Singapore now should generate ePay slips for all the employees of the organization to comply with this new rule of Ministry of Manpower. The organizations using an efficient Payroll system will already have the data required in their software and will just need to generate the ePay slip in the format given. At the most, some additional data will be required which can be done using a small update to the system. For the organizations not using a Payroll system with employee details as mandated, this is going to be a major work. A competent ERP with an integration of Accounting, Payroll, HRMS and the other business processes like the POS for retails and wholesale, travel system for travel businesses or the operations for the construction or manufacturing businesses will have to be installed in such organizations. Since the compliance is mandatory, all SMEs have to get the system up and running and issue itemized pay slip to all the employees of their organization from 1st April 2016 onwards.
The Ministry of Manpower has further made it mandatory to provide the Key Employment Terms or KETs in writing so that the employment disputes can be minimized. Once, both the employer and employee have their mutual terms in the paper signed by both parties, there is little scope for dispute unless thereâ€™s a marked deviation from the agreed terms. The MOM has also confirmed that heavy fine will be imposed on the employers who do not comply with the norms. Considering the cost of implementing a Payroll system in Singapore, the MOM has made these options available on their website for the SMEs so that they can generate the pay slips directly from the government website. They can also maintain hard copies of hand-written pay slips. The details regarding the KETs and itemized Pay slips are given in the MOM website along with helpline numbers and email addresses to be contacted for advisory services. The MOM is also conducting 2-day seminars and workshops for the employers to make sure they understand what is to be done and how it should be done.
Under the amended employment act, it is mandatory that the employer gives an itemized bill along with the salary or within 3 days of paying the salary. The Pay slip can be given as a soft copy or a hard copy which can also be a hand-written copy. The itemized Pay slip must contain the following details:
- Employer’s Full name
- Employee’s Full name
- Date(s) of payment of salary. Multiple dates are relevant when multiple payments are given to the same employee. It could be some pending payments or accrued bonuses.
- The basic salary should be clearly mentioned. Also, the details regarding the pay per hour of an hourly paid employee or the piece rate of an employee paid per piece of the product and the total number of hours or piece as the case may be.
- The period for which salary is paid
- Details regarding the allowances paid. For example, travel allowance, uniform allowance etc.
- Any additional pay like the bonus, holiday pay etc.
- Any deductions including the CPF contribution of the employee, loss of pay on account of leaves etc.
- Overtime hours (if relevant)
- Overtime pay (if relevant)
- The period for which overtime is paid if it is different from the salary period. (if relevant)
- Net salary paid
It is mandatory for the employers to produce pay slips of the last 2 years for all employees worked or still working in the organization. In the case of ex-employees, it is mandatory to produce their pay slips for the last 2 years and retain them for 1 year after they leave. Since this was mandatory to all organizations except SMEs, the current rule applies basically to them for the time being.
The SMEs can adopt cloud-based Payroll software solutions to comply with the MOM’s latest ordinance and at the same time benefit further from the digital data that will be available with them using this software. Though it is not mandatory to maintain the employee details in a digital form, such a step can reduce a lot of work related to the HRM. A simple Payroll model with employee details, terms of employment, salary details including the breakup of salary, government mandates for each employee etc. integrated with accounting can improve the salary disbursement and HR requirements of the SMEs. Using this data, the SMEs can also generate various comparison reports which they can use for appraisals, accounting and budgeting. Cloud-based implementation will be more cost-effective for the SMEs as they do not have to invest further in setting up a system and software exclusively for handling the employee data. Instead, the person in charge of HR can just input the data into the software using a browser over a secured internet connection. Cloud-based solutions will ensure the government compliance of the data input. It will also generate the required pay slips to be given to the employees and consolidated reports to the government. Later if any modification is done by the government, the updates will be done by the software vendor as it is mandatory. Cloud-based Payroll system solutions can be made accessible on the mobile platform also which makes it easier for the HRMs to access the data from anywhere, anytime of the day.