National Wages Council proposes 5.5% to 7.5% pay hike for lower-wage workers

EMPLOYERS should give their lower-wage workers a built-in wage increase of 5.5 per cent to 7.5 per cent, or at least S$85 to S$105, whichever is higher, the National Wages Council (NWC) said in its 2023/2024 wage guidelines on Tuesday (Oct 31).

These guidelines apply to employees earning a gross monthly wage of up to S$2,500 – the threshold of the 20th percentile wage level of the workforce.

While the percentage range of this year’s recommendations is unchanged from last year’s, the minimum quantum is slightly higher. NWC had proposed a wage increase of S$80 to S$100 in its 2022/2023 wage guidelines.

NWC’s guidelines said employers that have done well and have positive prospects should provide lower-wage workers an increase at the upper end of the wage range, while those facing uncertain prospects should do so at the lower to middle tier of the range.

Meanwhile, employers that have not done well should give their lower-wage workers an increase at the lower limit of the range, and raise wages further if business prospects improve.

“This year is particularly challenging because inflation has affected both sides – employers as well as workers,” said Desmond Tan, deputy secretary-general of the National Trades Union Congress (NTUC), during a joint briefing fronted by representatives from NWC, NTUC, the Singapore National Employers Federation (SNEF) and the Ministry of Manpower (MOM).

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The guidelines were thus carefully deliberated to be “fair and balanced”, to help employers cope with the current economic challenges while uplifting the livelihoods of workers, said NTUC president Mary Liew.

In particular, the “significantly higher percentage wage increase” for lower-wage workers was a “deliberate move to update their wages and narrow our income gap”, said SNEF president Robert Yap.

Nevertheless, recognising the cost-of-living concerns of all workers, the NWC urged employers to consider giving a one-off special lump sum payment to employees, “with heavier weightage for lower to middle-income employees”. “This should be by mutual agreement between management and the union for unionised members,” said NWC in its guidelines.

Asked for a ballpark range for the lump sum payment, Dr Yap replied that giving a fixed number may not be useful due to the varying situations of each company. Instead, the gudelines are based on affordability, how the company has performed and what sector the workers are in.

“It depends on the management and their relationship with the employees, and how they are going to put in the lump sum is based on the heart than anything else. So a hard set of figures... I don’t recommend,” said Dr Yap. “It’s up to the employers to look at what they should do.”

Separately, NWC also set out the Occupational Progressive Wage (OPW) requirements for the period between Jul 1, 2024, and Jun 30, 2026. The current requirements, which were implemented from Mar 1, 2023, apply up to Jun 30, 2024.

Unlike the sectoral Progressive Wage Models, the OPW applies to workers in specific occupations across all sectors and sets out wage requirements for various job levels.

The higher OPW wage levels for 2024 to 2025 will apply to some 64,000 lower-wage Singaporeans and permanent residents who are full-time administrators and drivers in firms that employ foreign workers. In addition to these recommendations, the NWC has also endorsed additional overtime wage requirements.

Asked how small and medium-sized enterprises (SMEs) can cope with the added stress of wage increases, Dr Yap reiterated that on top of the help schemes available, SMEs should look at transforming their businesses to become more relevant.

Agreeing, MOM workforce deputy secretary Kenny Tan urged employers to press on with business and workforce transformation. “Long-term productivity growth is essential to sustaining wage growth,” he said.