7 min Singapore’s employment prospects are advancing, and regulations under the Singapore Employment Act (EA) are reforming how companies handle overtime, rest days, termination, retrenchment (layoffs), and, now, digital contracts.
These changes really matter for both local and international workers, particularly as businesses are getting serious about compliance and transparent human resource practices.
This is why we have boiled down the most important updates for you in this blog, without overwhelming you with details and providing enough context to make the right decisions.
What Is Changing in the Overtime Calculation Rules?
Overtime calculations remain among the most complicated clauses in the Singapore Employment Act.
Employees under the protection of Part IV continue to be licensed to 1.5 times their normal hourly rate of pay for both overtime and general holiday work.
Key Points:
- Overtime will only be applied after 44 hours of work per week.
- Work on a rest day or public holiday is calculated differently.
- Employment pass holders or higher-earning staff are generally not protected under Part IV.
Real-world example:
A logistics company that organised weekend shifts had to implement a suitable overtime calculation for rest days to avoid non-compliance and claim risks.
How Are Rest Days and Public Holidays Handled?
Each employee is entitled to one rest day per week and 11 days of paid public holidays in a year under the Singapore Employment Act.
If employees do work on these days:
- Public holiday work requires an additional day’s pay or another day off.
- Rest-day work depends on whether the employee worked half a day or a full day.
These rules can be overwhelming for businesses with shift work or 24-hour operations, requiring precise scheduling and payroll management, especially when dealing with cross-border teams and global payroll solutions.
What Are the Notice Period Rules for Termination?
Notice periods under the Singapore Employment Act are based on years of service, unless the employment contract states otherwise.
Minimum statutory requirements:
- Less than 26 weeks: 1 day
- 26 weeks to 2 years: 1 week
- 2 to 5 years: 2 weeks
- 5 years or more: 4 weeks
When contracts are silent or unclear, these are the guide baselines employers must follow. Clear documentation helps keep things from getting out of control and ensures a transparent offboarding process.
How Are Retrenchment Benefits Calculated?
The retrenchment payout in Singapore is not mandatory or fixed. But companies with 10 or more employees must inform MOM of any retrenchments.
The best practice in Singapore, during restructuring, is to make ex gratia payments based on years of service. While not compulsory under the Act, it maintains goodwill and helps employees exit responsibly.
Real-world example:
A Car dealership that downsizes its stores may offer 2 weeks’ salary per year of service to long-term employees as a responsible retrenchment activity.
What Rights Do Employment Pass Holders Have?
The Singapore Employment Act, such as Part IV (dealing with hours and overtime), does not apply in full to an Employment Pass Holder.
However, EP Holders can still benefit from:
- Fair contract terms.
- Salary payment requirements.
- Protection from wrongful dismissal.
This distinction is important for businesses that employ foreign workers and are integrating the payroll processes with overseas systems, such as Australian payroll services.
Why Are Digital Employment Contracts Becoming Critical?
The Singapore Employment Act does not state digital contracting as a requirement, but MOM does recommend appropriate electronic records.
Why companies are embracing digital contracts:
- Easier audit trails.
- Faster onboarding.
- Better records of payroll, working hours, and benefits.
This also falls in line with businesses engaged with distributed teams, or companies that provide payroll outsourcing services Singapore to ensure that their company’s records are accurate, in compliance, and up to date.
What Can Employers Do to Prepare for These Changes?
Here’s an easy checklist for HR Teams:
- Check work agreements and turn to MOM-preferred digital formats.
- Verify statutory overtime and rest-day premiums against the Singapore Employment Act.
- Provide EP and S Pass workers with at least the statutory requirements.
- Create fair and transparent offboarding protocols.
- Train managers to handle schedules, holiday pay, and notice periods legally.
What’s the Best Way Forward With These Shifts?
The Singapore Employment Act continues to develop. The 2025 modifications show a clear direction towards fairness, transparency, and documentation. Employers who are flexible with these ever-changing laws will have much fewer non-compliant issues and gain more trust throughout local and International teams.
And this is where Procloz adds value to your organisation.
By offering expertise in payroll precision, contract administration, and International compliance development. We specialise in keeping companies ahead of every employment law change.
Our extensive experience in managing global workforces ensures that your payroll, onboarding, and HR processes are in line with MOM’s requirements.
Looking to safeguard your workforce, payroll, and peace of mind?
Talk to us – before the next update arrives!
FAQ’s
1. Who is covered under the Singapore Employment Act?
The Singapore Employment Act covers most employees working under a service contract in Singapore, except domestic workers, seafarers and public officers who fall under separate regulations.
2. What is the minimum number of working hours under the Act?
The Singapore Employment Act does not fix a minimum number of working hours, but full-time employees generally work up to 44 hours a week as guided by the Act.
3. How is annual leave determined under the Act?
Under the Singapore Employment Act, employees who complete at least three months of service receive paid annual leave starting from 7 days, increasing with years of service.
