Recruitment in Singapore with GLA (2025)

After Singapore company registrationRecruiting personnel to operate and manage stores, businesses... is one of the issues that many businesses in Vietnam are concerned about.

In a modern and developed island nation like Singapore, most workers have a good awareness of the Singapore Employment Act and have some clear understanding of their rights at work.

The following article by GLA will provide investors and business owners with some key points in the Employment and Labor Law in Singapore as well as some guidelines for hiring workers in this lion island nation.

1. Overview of Employment and Labor Law in Singapore

1.1. What is the Singapore Employment Act?

This is the main legal document that clearly states the basic conditions and regulations in the recruitment of human resources/labor. At the same time, it also clearly stipulates the basic labor conditions, working conditions, rights, obligations and responsibilities for employers and employees in Singapore.

The first important thing that business owners should consider and find out before recruiting workers is: are the employees and workers hired protected by this law? This is very important because:

If an employee is covered by this Act, the terms set out in the employment contract cannot be less favourable than those set out in the Labour Code.

On the contrary, if the employee or worker is recruited outside the scope of the Employment and Labor Law, the terms and conditions can be agreed and negotiated by both parties and must be clearly stated in the employment contract. This contract will be binding on both parties.

The Employment Act applies to all employees and workers except:

• Managerial & Executive Positions: Individuals in such managerial positions are defined as those who have direct authority or influence in hiring, firing, rewarding, disciplining other employees; or duties primarily related to the management and operation of the business.
• Professionals (people with a college education along with specialized knowledge or skills) who perform tasks similar to those of managers or executives. (Examples: lawyers, accountants, dentists, and physicians).
• Domestic workers.
• Seamen.
• Most government employees.

1.2. Characteristics of employees under labor law

Employment and labor laws classify employees into:

• Employees earning less than SGD 2.000 a month.
• Employees earning over SGD 2.000 a month.

Employees earning less than SGD 2,000 a month will be provided with additional benefits relating to "Holidays, Working Hours and Overtime, Public Holidays, Annual Leave, Sick Leave, Retirement Allowance, Unemployment Allowance.

2. Important obligations and responsibilities for business owners in Singapore

The employment contract is the most important document because it clearly states the terms and conditions of employment and working conditions between the employer and the employee. Although the employer can draft the contract himself, the employment contract should be consulted and supported by a lawyer, specialist or service company... Please note that if the employee is recruited under the protection of the Employment and Labor Law, the employment contract must comply with the minimum conditions prescribed by the Law. Some key points to note are as follows:

1. Appointed position
2. Term of employment contract, if applicable
3. Start date of employment
4. Remuneration
5. Number of working hours
6. Employee benefits
7. Probationary period
8. Code of conduct
9. Termination of contract

2.1. Employee income report

Business owners are responsible for preparing tax returns for all their employees (individuals employed in Singapore) to report their annual income under the Income Tax Act.

2.2. Tax issues for foreign employees

For foreign employees who terminate their employment with the company, or leave Singapore for a period exceeding three months, Tax clearance must be carried out to ensure that the employee has paid sufficient tax.

As an employer, the employer must notify the tax authority (IRAS) and withhold the wages of foreign employees from the date the individual notifies the employer of his or her intention to leave the employment or when the employer intends to transfer the foreign individual to another country.

Once IRAS has made its assessments and issued a certificate confirming that all taxes have been paid, the business owner can then make payments due to the employee.

2.3. Contribution to the Central Provident Fund (CPF)

The social security system for all citizens and permanent residents is called the Central Provident Fund (CPF). It is one of the oldest contributory pension schemes in Asia. SPS in Singapore dates back to the 50s.

The current scheme has been in place since 1955 and was last amended in 2001. The central concept of the scheme is a life-time fund, which is contributed to by employees throughout their lives and provides financial security when they retire or are unable to continue working. Employers and all local employees (citizens or permanent residents) in Singapore are required to make contributions to the CPF.

• For local employees and PR permanent residents: Employers are required to contribute to CPF for all local employees (citizens and PR permanent residents) earning more than SGD50 a month. The maximum CPF contribution rate for employers is 16% and for employees is 20%, however, the rate may be lower depending on several factors such as the employee's age, permanent resident status, etc.
• For foreign employees: CPF contributions for foreign employees are not applicable.

To better understand how to calculate CPF contributions, please refer to: What is CPF Singapore?

 2.4. Payment of fees to the Government (levies)

For low-skilled or unskilled foreign workers: The Singapore Government will collect a Foreign Worker Levy (FWL). The Foreign Worker Levy is a pricing mechanism to regulate the demand for foreign workers in Singapore.

Hire students

For students who are Singapore citizens / Singapore permanent residents (PRs): Students who are citizens or PRs in Singapore can be employed full-time and part-time, without any restrictions. Students are entitled to CPF contributions, unless exempted. If an employer wants to take on an intern, there is no need to contribute to the CPF fund as the student is essentially just studying and being trained by the company. However, it is common practice for employers to pay a monthly allowance to the intern.

For foreign students: Foreign students are not allowed to work in Singapore during their studies or vacations, and can only work if they are granted a Work Pass exemption by the Employment of Foreign Manpower. If an employer wishes to employ a foreign student as an intern or to participate in a programme, the employer must apply for a Training Employment Pass/Training Work Permit on behalf of the student. At the same time, the employer does not need to pay any government/Foreign Worker levy fees because the student is essentially a student and is being trained by the company as part of the programme. It is common practice for employers to pay a monthly allowance to the foreign student.

Recruiting part-time and contract employees

1. Part-time employees are defined as those who are required to work less than 35 hours per week.
2. Contract workers are individuals who work on a fixed-term employment contract or individuals who are hired when a company needs additional manpower. Employment contracts usually last for a specified time frame and end when the specified task/job is completed.

Unlike most other countries, under Singapore's Employment and Labour Act, part-time and casual employees enjoy the same protections as permanent full-time employees. However, part-time and casual employees will have more flexibility for both employers and employees, including employment benefits, leave days, etc.

Please note that, as a common practice in Singapore, part-time and casual employees are often not entitled to certain benefits such as bonuses, medical insurance and other perks that full-time employees are entitled to.

The legal age to work in Singapore is 17 years and above. However, employers are allowed to employ children and young people between the ages of 13 and 16. Please note that there are restrictions on the types of work that children and young people can do. The retirement age in Singapore is 62.

Hire foreign staff

Most companies in Singapore hire foreign talent to supplement their local workforce. The reasons behind this trend are often attributed to: an aging population, declining birth rates, economic growth and mainly the unavailability of suitable local talent for certain occupations such as IT, business and finance, research and development R&D. Similarly, certain types of jobs, such as construction and domestic work are not preferred by locals, thus hiring foreign workers appears as an attractive option. Given the country’s history of attracting and hiring foreign professionals, the Singapore government has been progressively liberalizing its immigration policy.

Under the Employment Act, foreigners must have a valid work permit to work in Singapore. If an employer wishes to employ a foreign worker, the employer will have to apply for a valid work visa or work permit for the employee on their behalf before the employee can commence work. Please note that certain types of jobs have restrictions on the number of employees that can be hired.

The foreign workforce in this lion island nation can be divided into three main groups as follows:

1. Skilled professionals (e.g. software engineers, doctors, research and development specialists...) who are granted EP (Employment Pass).
2. Semi-skilled professionals (e.g. technicians, chefs, administrative professionals) who will be granted an S Pass.
3. Unskilled Professionals (e.g. construction workers, domestic workers) who are granted a work permit, also known as an R Pass.

The table below will provide a detailed look at the different jobs that business owners will need to apply for depending on the type of foreign employee you intend to hire:

3. Some guidelines on recruiting personnel in Singapore

Given the diversity of Singapore’s workforce across races, ages and genders, employers are advised to adopt progressive and equitable human resource policies, especially in matters relating to talent recruitment. In this regard, the Ministry of Manpower has issued certain guidelines on how to implement equitable employment practices. A summary of the guidelines is as follows:

Employers must always follow a fair talent selection criteria while selecting and recruiting candidates for employment.
Skills, experience and ability to perform the job should take precedence over age, race, gender, religion, family status or disability.
Selection criteria should be relevant to the job requirements and should be made available to all applicants. They should also be reviewed regularly to ensure their timeliness and relevance.
Job ads should avoid listing attributes such as age, gender, marital status, race, religion and language unless it is legitimately valid.
The application form should only request information relevant to assessing the applicant's suitability for the job. If personal information is required, the employer should state that this is for administrative purposes only.
Job interviews and tests should be limited to questions relevant to the job requirements.

Here are some popular recruitment channels:

• Employment Agencies/Recruitment Firms Most large companies are willing to hire head hunters to select suitable candidates. This approach is convenient because it takes less time and effort. Some international recruitment agencies such as Hudson, Hays, Robert will be worth considering...
• Newspaper advertisements: classified advertisements in The Straits Times (the local newspaper with the highest circulation) are popular among both employers and job seekers.
• Internet Websites: There are 4-5 popular job websites where employers can post job requests for a fee. These websites are popular for regional positions and mainly cater to the Singapore market.
• Career Fairs: Career fairs are becoming increasingly popular in Singapore attracting over 400.000 job seekers each year.
• Campus recruitment: Most universities/colleges in Singapore allow employers to conduct interviews and recruit fresh graduates and post-graduates.

4. How does GLA support businesses in recruiting?

Along with economic integration - labor circulation between member countries through the AEC common economic community, more and more Vietnamese investors come to Singapore, with many different purposes such as: establishing a company, investing - doing business, participating in a short-term English course, etc.

Although the Singapore government has been creating many advantages and incentives for foreign investors when doing business and working here.

But if you are a Vietnamese investor or business owner 

1. Confused about some issues such as recruiting staff.
2. Looking for partners, working with banks.
3. Looking for a distributor or business location,
4. Apply for work permit in Singapore, family relocation, life in Singapore, or.
5. Create conditions for children to study here
6. Simply transfer key staff to Singapore to improve knowledge, skills, or manage a Singapore company.

GLA will be the powerful support you are looking for.

Understanding these difficulties, Global Links Asia has linked up with a network of different partners in Singapore to best support Vietnamese businesses not only in establishing companies and doing business but also in living and working in Singapore.

For any concerns, please refer to https://globallinks.asia/vi/ or contact our consultants to receive the best advice and support.

5. Frequently asked questions about recruiting staff in Singapore

Highlights

• The Employment Act clearly stipulates working conditions, rights and obligations of business owners and employees, applicable to most workers, except senior staff and experts.
• Employee benefits include salary, working hours, leave, insurance, unemployment benefits and CPF contributions, with differences between employees earning below and above S$2.000/month.
• Employment contracts need to ensure compliance with laws, income tax reporting, CPF payments, handling tax procedures when foreign employees leave, and compliance with government fee regulations.
• Businesses wishing to recruit foreign workers to work for a company in Singapore need to apply for appropriate work permits for each role and position of the employee.