Singapore's Progressive Wage Model
Singapore does not have a minimum wage system in the classical sense. Rather, Singapore’s has to-date adopted an industry-to-industry approach, termed the Progressive Wage Model (“PWM”).
From 1 March 2023, the PWM extends beyond identified industry sectors to cover specific occupations regardless of the employer’s industry classification.
This is termed as Occupational Progressive Wages (“OPW”) and is meant to uplift local workers who are in occupations that exist across many sectors.
Occupational Progressive Wages
The OPW’s core pillars are unchanged from the PWM:
(i) Clear pathways for workers to progress in their careers,
(ii) Minimum wage requirements for different rungs of the career pathway (Singapore citizens and Permanent Residents (“PRs”)),
(iii) Training to improve workers’ skills & productivity – to uplift the capacity to contribute more to employers’ bottom line and justify the wage increases.
The first 2 occupations covered under the OPW are Administrators and Drivers. OPW is compulsory and applies to ALL firms who employ full-time or part-time employees in administrative or driving roles on a contract of service and hire foreign workers. This is irrespective of the industry sector that the firm operates in.
OPW Wage Requirements from 1 March 2023 have been set. Wage levels for March 2024 and later will be reviewed by Singapore’s National Wages Council sometime in 2023.
OPW Wage Requirements for Drivers
The OPW for drivers is a two-level career progression model:
The first rung of the career level is for General Drivers who operate vehicles requiring a Singapore Class 3 driving license or lower. Examples of jobs include motorcycle delivery drivers, van drivers and tram drivers etc. These jobs are often found in the Logistics industry.
General Drivers progress to become Specialised Drivers, who operate vehicles requiring a Singapore Class 4 driving license and higher. Examples of jobs include trailer truck drivers, bus drivers, chauffeurs, and concrete mix truck drivers etc. Such jobs can be in various sectors including Logistics & Supply Chain, Construction etc.
OPW gross monthly wage requirements for Full-time General Drivers start at SGD $1,750 ($9.17 per hour for part-timers) from 1 March 2023, while those for Specialised Drivers are $1,850.
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OPW Wage Requirements for Administrators
The OPW for administrators is a three-level career progression model.
Level 1 is for Administrative Assistants who perform basic admin tasks like data entry, receiving & registering documents, sort & store files, run errands etc. Examples of Admin Assistant jobs are: data entry clerk, library clerk, office attendant.
Level 2 is for Administrative Executives who perform more advanced admin tasks like accounting & bookkeeping, customer facing tasks (e.g. answering & directing phone calls, providing client information & services), manage records (e.g. maintaining & updating filing and inventory), handle money, prepare production schedules, secretarial tasks (e.g. arrange appointments, organise meetings.
Examples of Admin Exec jobs are: Office cashier, bank cashier, receptionist, telephone operator, secretary, verbatim reporter, typist & word processing operator, concierge, clerks (e.g. general office clerk, customer service clerk, stock clerk, transport clerk, statistical clerk, legal clerk, accounting and bookkeeping clerk, production clerk, computer operations clerk, postal service counter clerk, finance and insurance clerk, travel agency clerk, proofreading clerk)
Level 3 are Administrative Supervisors – essentially Office Supervisors who supervise staff in admin or clerical roles, and manage personnel, resolve work problems & coordinate work between an organisation’s units.
Administrators are found in virtually every industry and organisation.
OPW gross monthly wage requirements for Administrative Assistants start at SGD $1,500 ($9.00 per hour for part-timers) from 1 March 2023, rising to $2,000 for Administrative Executives and $2,800 for Administrative Supervisors.
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Workforce Training Requirements
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.
The only way to square the circle is to improve productivity. This can be done via 2 ways:
1. Adopting digital technologies that streamline business processes
2. Investing in workers’ training so they can improve skillsets and productivity. Ultimately, a well-trained, skilled employee produces more for the organisation.
Hence, training is a key pillar of OPW.
Employers must ensure that your Singapore citizen & PR Drivers and Administrators meet the OPW training requirements. These are:
1. At least 1 Workforce Skills Qualification (“WSQ”) Statement of Attainment (no restrictions on any WSQ course currently); or
2. An In-House Training programme.
To meet the training requirements – the in-house training programme will have to be guided by Training Objectives, Training Modality, Key Training Tasks and Training Duration.
Singapore’s Ministry for Manpower (“MOM”) expects employers to show supporting documentation on their in-house training programme and records of workers who attended the trainings – where required.
On-the-job Training (“OJT”) can be counted towards the In-House Training if the OJT fulfils these requirements.
The ArcLab platform is a simple and effective way for organisations to put in place an in-house training programme:
1. An entire training programme can be developed online and is suitable both for the office setting (Workers in Administrator roles can consume training via their desktops / laptops), as well as for workers who do not work in an office environment – Drivers who can consume training via their mobile phones.
2. ArcLab’s Learner Analytics Dashboard keeps detailed records of every single workers’ training, including time spent on individual modules and as a whole, scores for Knowledge Assessment quizzes etc. These can be easily exported and presented to MOM as required.
Here’s an example of a Training Module for Motorcycle Drivers.
If you found this way of learning engaging and effective, try building a training programme for your workforce now on ArcLab. Here are a few sample training templates from ArcLab Discover, our free library:
1. Safe Riding Training – suitable for General Driver roles (motorcycle delivery drivers) in Logistics firms etc.
2. Safe Manual Handling Training – suitable for General Driver & Specialist Driver roles in Construction, Logistics firms etc.
3. Customer Service (Serving Difficult Customers) Training – suitable for Administrative Executive roles (e.g. receptionist, customer service clerk, receptionist, telephone operator etc.) working in any industry.
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.
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 to eligible employers.
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 businesses to ease into the PWM and OPW 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 products and services that satisfy customer needs, 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 and OPW help break the vicious cycle of Deskless 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.