National Wages Council recommends built-in pay rise of 4.5 to 7.5% for lower-wage workers

EMPLOYERS should give lower-wage workers a built-in wage increase of 4.5 to 7.5 per cent of gross wages, or S$70 to S$90, whichever is higher, the tripartite National Wages Council (NWC) said in its latest guidelines on Oct 29.

These recommendations take into account continuing economic uncertainty faced by employers, particularly those hit by Covid-19, said the NWC.

While the NWC has given guidelines on wages for lower-wage workers in the past, this is the first time it is doing so specifically in the context of the progressive wage model.

"As this is the first year of implementation and there is need for lower-wage workers to gain more ground with the median worker, the NWC will consider a higher range of progressive wage growth next year should the economic situation improve," it added.

The guidelines apply to workers earning a gross monthly wage of up to S$2,000, which covers about a fifth of full-time employed residents.

The aim is for wages of lower-wage workers to grow faster than median wages, said the NWC. It also called on employers to give higher percentage wage increases for workers earning relatively lower wages.

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"A key part of ensuring long-term growth is promoting wage catch-up for lower-wage workers," said National Trades Union Congress president Mary Liew. She also hoped that employers will consider channelling increases towards wage components that improve income stability for lower-wage workers.

The tripartite workgroup on lower-wage workers had earlier recommended that the NWC should guide the rate of progressive wage growth.

Tripartite clusters should refer to the guidelines in setting wage rungs for their respective sectoral progressive wage models, "while taking into consideration their sectors' unique circumstances", said the NWC.

For employers, those that have seen healthy revenue growth should aim for the upper bound of the range, while those that are recovering or have recovered may aim for the lower to middle sections of the range.

Employers that are freezing or continuing to freeze wages should instead consider a built-in wage increase of up to S$50 for lower-wage workers.

And those that are making further wage reductions should implement a wage freeze for lower-wage workers instead.

Noting that many lower-wage workers are in outsourced sectors, the Singapore National Employers Federation president Robert Yap hoped service buyers and consumers would play their part by "paying a reasonable price for better services".

The tripartite workgroup had also said that the NWC should recommend wage growth for occupational progressive wages (OWP), which apply across sectors.

The workgroup has made recommendations on initial wage rungs for OWP, to be implemented from March 2023. The NWC said it will consider making recommendations on OWP wage growth next year.

In line with the tripartite workgroup's recommendations, the NWC is no longer using basic monthly wage as a reference, and instead referring to gross monthly wages, which include basic wages as well as components such as allowances, commissions and overtime payments.

READ MORE:

• Roll back crisis-prompted wage policies if business has recovered: National Wages Council
• Tripartite workgroup's recommendations could uplift 94% of lower-wage workers' pay: MOM