Singapore's Progressive Wage Model
Singapore does not have a minimum wage in the classical sense. Rather, she has adopted an industry-by-industry approach to setting what is termed as the Progressive Wage Model (“PWM”).
PWM started in September 2014 for the Cleaning sector in Singapore, and gradually extended to more and more industry sectors in the years since – Security and Landscape sectors in 2016, Lift & escalator sector in 2019, Retail sector in 2022, and the Food Services and Waste Management sectors in 2023.
The core pillars of PWM are:
(i) Clear pathways for workers to progress in their careers,
(ii) Minimum wage requirements for different rungs of the career pathway (applicable to Singapore citizens and Permanent Residents (“PR”)),
(iii) Training to improve workers’ skills & productivity – so they have the capability to contribute more to employers’ bottomline, justifying the wage increases.
To hire foreign workers, Singapore firms must comply with their respective industry’s PWM requirements for their local employees covered by the respective PWMs, and the Local Qualifying Salary (“LQS”) requirements for all other local employees.
From 1 March 2023, firms who hire at least 1 Singaporean or PR workers covered by the PWM / Occupational PW are eligible for a newly-launched PW Mark. This enables consumers and corporate buyers to easily identify and support these PW Mark-accredited firms.
Important note for firms who provide goods & services to the Singapore Government: PW Mark accreditation will be a new procurement requirement, for Government tenders called from 1 March 2023.
ArcLab had previously hosted a webinar where we discussed the PWM with industry leaders from Fei Siong Group, Kiosks Collective (operator of CRAVE Nasi Lemak, Pezzo etc.), IHRP and StaffAny – the motivations behind the PWM’s raising of wages for workers – many of whom are Deskless / blue-collar / frontline workers that have to-date commanded relatively low pay, and are disproportionately hurt in today’s higher-inflation world.
Now let us now look at the PWM requirements for Singapore’s Food Services sector.
PWM for the Food Services Sector
Under the PWM for Food Services, F&B businesses are split into 2 categories:
Category A is comprised of food establishments without wait staff. These include Quick Service (“QS”) F&B establishments like fast-food outlets, food courts etc. Essentially, self-service F&B eateries.
For PWM purposes, one career track is mapped out – stipulating a gross monthly wage requirement of SGD $1,750 from 1 March 2023 for Full-time entry level Food / Drink Stall Assistant ($9.18 per hour for part-timers), with progressive increments as (s)he moves up the career ladder.
This PWM wage minimum rises to $1,915 per month on 1 March 2024, then $2,080 on 1 March 2025.
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Category B is made up by food establishments WITH wait staff, as well as Caterers and Central Kitchens.
Two career tracks apply for Category B food businesses.
1. “Back-of-house” roles, with these minimum monthly gross wage requirements:
(Click table to enlarge)
2. “Front-of-house” job roles, with the following monthly gross wage requirements:
(Click table to enlarge)
It’s important to recognise that workers’ wages are also employers’ costs, so raising wages cannot be done sustainably without a corresponding rise in workforce productivity. Otherwise, margins are eroded for the business and product pricing cannot be competitive, which hurts consumers.
F&B establishments can adopt a variety of process innovations and digital technologies that make the business more productive.
It is also imperative that F&B businesses invest in upgrading workers’ skills so they can increase their productivity and skillsets, offering great food service experiences to customers and helping F&B employers to achieve more.
Hence, training is a key pillar of the PWM.
Higher Productivity: Training the Workforce
For the Food Services PWM – employers must ensure that their Singapore citizen and PR workers attain at least 2 Workforce Skills Qualification (“WSQ”) Statement of Attainment, from the list of approved WSQ training modules. Alternatively, employers that have in-house WSQ training modules with prefix “FSS” in accompanying Technical Skills & Competencies (“TSC”) code can use these modules to meet the training requirements.
PWM training requirement must be done within 6 months of a new hire’s employment start date, or by 29 February 2024 for existing workers.
F&B employers can consider various Approved Training Organisations (“ATOs”) offering WSQ courses that meet the PWM’s requirements.
One of these is FSI, an ATO backed by Fei Siong Group – one of Singapore’s largest F&B groups with 173 (& growing) outlets across 20 brands (e.g. Malaysia Boleh, Encik Tan, Nam Kee Pau etc.) employing over 1,600 staff. They are a proven market practitioner – amalgamating decades of practical real-world F&B experience into a sound training curriculum at FSI.
FSI is a public WSQ ATO accredited by SkillsFuture Singapore, supported by Enterprise Singapore and Institute of Adult Learning. They offer WSQ courses that meet the PWM requirements.
FSI offers structured training via in-person classes at their centrally-located venue right above Tanjong Pagar MRT station.
FSI’s courses are short and concise, helping F&B operators to upskill and reskill workers with minimum fuss and time commitment.
FSI has also created bite-sized learning modules, readily available 24/7 on mobile devices, shortening the time needed to induct new F&B hires and impart knowledge.
So if you are an F&B business, consider FSI for your training needs –
(i) to meet PWM requirements, and
(ii) more importantly, continuously skill up your workforce to achieve more for your business.
For starters, check out FSI’s mobile learning module explaining the Food Services PWM ->
Supporting F&B Employers
The Singapore Government has committed to providing assistance for employers:
1. Progressive Wage Credit Scheme: From 2022 to 2026, the Government is co-funding eligible wage increases given to lower-wage workers. To reduce administrative burden for employers, any co-funding payouts are automatically disbursed.
2. Workfare Skills Support Scheme: Employers’ training costs for workers above 35 years old and earning less than $2,300 per month are significantly offset.
These would help F&B businesses to ease into the PWM in the initial period. However, the true benefits accrue over the medium-to-long term for the businesses, as a more productive workforce produces much more and higher-quality offerings for the business, and ultimately adds to the bottom line. Everyone wins – Businesses, Workers, Consumers.
Supporting Lower-Wage Workers
It is time to break the practice of only wanting our own salaries to go up, while our costs (other people’s salaries) stay low. No longer should Singapore’s domestic economy be built on the model of a low-wage, foreign-only workforce.
ArcLab’s vision has a strong impact focus on uplifting deskless worker lives and livelihoods. To achieve this, we know that ultimately – workers win only when businesses win.
We are hopeful that the PWM helps break the vicious cycle of deskless blue-collar workers being viewed as low-productivity and hence not worthy of skills investment and higher wages. In such a scenario, everyone loses – businesses, and workers especially, in today’s high-inflation world.
Instead, an upskilled workforce means higher productivity and profitability. Businesses can then justifiably pay higher worker salaries. This means better livelihoods and stronger loyalty to employers (lowering costly staff turnover for businesses). This turns the previous vicious cycle into a new virtuous one, helping all of us – government, businesses and consumers to all do well and do good in our new higher-inflation world.