Tripartite workgroup's recommendations could uplift 94% of lower-wage workers' pay: MOM
MEASURES to raise incomes of lower-wage workers will be introduced in two phases - in September next year and March 2023 - now that the government has accepted all 18 of a tripartite workgroup's recommendations.
From Sept 1, 2022, the Progressive Wage Model (PWM) will be expanded to the retail sector, while PWMs for the cleaning, security and landscape industries will also cover in-house workers, according to a Ministry of Manpower (MOM) statement on Monday.
At the same time, firms that want to hire foreigners will have to pay all local workers at least the Local Qualifying Salary (LQS) of S$1,400. Currently, they only need to pay this amount to some local employees, depending on the number of foreigners they hire.
By March 1, 2023, the model will apply to food services workers, while occupational progressive wages will cover specific occupations across all sectors, beginning with administrators and drivers.
The model will also be extended to waste management workers by 2023, although no specific date was given.
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A Progressive Wage Mark (PW Mark) will also be created to accredit firms that pay progressive wages. This informs corporate buyers and individual consumers, enabling them to support such firms.
These are among recommendations put together by the tripartite workgroup on lower-wage workers convened in October 2020 and chaired by Senior Minister of State for Manpower Zaqy Mohamad.
"We have been able to take progressive wages to new heights with wide coverage of 234,000 or 82 per cent of lower-wage workers. With the PW Mark initiative, we can potentially reach 94 per cent of lower-wage workers," he told reporters during a briefing.
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The model - which former Manpower Minister and workgroup adviser Josephine Teo had previously described as "minimum wage plus" - currently covers cleaners, security guards, landscaping workers and lift maintenance workers. They number about 28,000 or 10 per cent of lower-wage workers.
Mrs Teo, who is now Communications and Information Minister, said despite the current economic uncertainty, a "remarkable" tripartite consensus was reached.
She noted that many lower-wage workers were visibly on the frontline since the beginning of the Covid-19 pandemic, and while they were keeping Singapore safe, their own prospects, jobs and stability were not as clear.
At that time, Mrs Teo reached out to National Trades Union Congress secretary-general Ng Chee Meng and Singapore National Employers Federation (SNEF) president Robert Yap, whom she said were very supportive of the idea of uplifting lower-wage workers.
Mr Zaqy said the workgroup has extensively engaged over 1,800 people, including union leaders, business leaders, academics, human resources professionals and lower-wage workers over the past 10 months. Through the process, the unions are assured that the workers' interests are protected, while employers are brought in to support the objectives, he said.
"The recommendations take our existing efforts to a new level - with steady and bold steps ahead - to build a more inclusive Singapore, so that our lower-wage workers can achieve progress through solidarity and dynamism," Mr Zaqy explained.
Singapore Business Federation chief executive Lam Yi Young, who welcomes the recommendations, said the changes should be implemented in a fair and equitable way to ensure a level playing field so that companies which pay fair wages will not be unduly disadvantaged in terms of cost competitiveness.
The changes should also be easy to implement to avoid imposing unnecessary administrative burden on businesses, he added.
"We hope the government, as a major buyer of goods and services, will take the lead in recognising companies that pay fair wages during government procurements, taking into account the added costs in the budgets for government projects and being open to making price adjustments to existing contracts affected by the PWM," said Mr Lam.
SNEF, which is part of the workgroup, said in a statement that it strongly supports the recommendations, noting that it had conveyed two key concerns raised by employers during the workgroup's deliberations. These are the timing of the changes and the sustainability of cost increases, especially for companies that are still struggling from the pandemic.
Dr Yap said the federation is "quite assured" by union leaders and the government that transitional support will be provided for employers.
"More importantly, the recommendations are progressive as they do not just focus on paying better wages to lower-wage workers but also focus on progressive business and employment practices that will improve their capabilities and well-being," he said.
During the briefing, Manpower Minister Tan See Leng said the pandemic has shown how the PWM is "significantly superior" compared with a blunt minimum wage model, especially since certain sectors, such as hospitality and aviation, continue to see significant downside risks.
"Because of that, if you try to put up a minimum wage model and you expect these industries, which are going through very difficult times, to say that 'yes, we support this', I think it's going to be very, very, very difficult and a very tough act to follow, for many of them," Dr Tan said.
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