Employment Act 1968 — PART 3: PAYMENT OF SALARY

Part of a comprehensive analysis of the Employment Act 1968

All Parts in This Series

1. PART 1
2. PART 2
3. PART 3 (this article)
4. PART 4
5. PART 5
6. PART 6
7. PART 6
8. PART 7
9. PART 8
10. PART 9
11. PART 10
12. PART 12
13. PART 13
14. PART 14
15. PART 15
16. PART 15
17. PART 16
18. PART 1
19. PART 3
20. PART 4
21. PART 5
22. PART 6
23. PART 7

Timely Payment of Salary: Key Provisions and Their Purpose under the Employment Act

The Employment Act of Singapore contains explicit provisions to regulate the payment of salary to employees, ensuring fairness and protecting employees’ rights. These provisions mandate the frequency, timing, and conditions under which salary must be paid, as well as restrictions on deductions. Understanding these key provisions is essential for both employers and employees to maintain compliance and uphold workplace justice.

"An employer may fix periods (called for the purpose of this Act salary periods) in respect of which salary earned is payable." — Section 20(1), Employment Act 1968

Verify Section 20 in source document →

This provision allows employers to define salary periods, such as weekly or monthly pay cycles, providing flexibility while ensuring clarity on when salary is earned and payable. The purpose is to establish a clear framework for salary calculation and payment intervals.

"A salary period must not exceed one month." — Section 20(2), Employment Act 1968

Verify Section 20 in source document →

This limitation ensures employees receive their salary at least monthly, preventing undue delays in payment. It protects employees from financial hardship that could arise from extended payment intervals.

"Salary earned by an employee under a contract of service, other than additional payments for overtime work, must be paid before the expiry of the 7th day after the last day of the salary period in respect of which the salary is payable." — Section 21(1), Employment Act 1968

Verify Section 21 in source document →

This provision mandates prompt payment of regular salary within seven days after the salary period ends. The rationale is to ensure employees have timely access to their earned wages, supporting their financial stability.

"Additional payments for overtime work must be paid not later than 14 days after the last day of the salary period during which the overtime work was performed." — Section 21(2), Employment Act 1968

Verify Section 21 in source document →

Overtime payments are treated separately with a slightly longer payment window of 14 days. This acknowledges the administrative complexity in calculating overtime pay while still protecting employees’ right to timely remuneration.

"The total salary and any sum due to an employee who has been dismissed must be paid on the day of dismissal or, if this is not possible, within 3 days thereafter." — Section 22, Employment Act 1968

Verify Section 22 in source document →

This provision safeguards employees who are dismissed by requiring immediate payment of all outstanding salary and dues. It prevents employers from withholding final payments, which could otherwise cause financial distress to dismissed employees.

"No deduction is to be made by an employer from the salary of an employee, unless the deduction is authorised by or under any provision of this Act or is required to be made by order of a court or other authority competent to make such order." — Section 26(1), Employment Act 1968

Verify Section 26 in source document →

This clause protects employees from unauthorized salary deductions, ensuring that any deductions are lawful and transparent. It prevents exploitation and arbitrary withholding of wages by employers.

"Any employer who fails to pay salary in accordance with the provisions of this Part shall be guilty of an offence." — Section 34(1), Employment Act 1968

Verify Section 34 in source document →

This provision establishes the legal obligation for employers to comply with salary payment rules, reinforcing the seriousness of timely payment and providing a basis for enforcement and penalties.

Definitions Relevant to Salary Payment Provisions

The Employment Act also clarifies certain terms to avoid ambiguity in the application of salary payment rules, particularly concerning recovery bodies related to healthcare schemes.

"In this section — 'CSHL Scheme recovery body' has the meaning given by the definition of 'recovery body' in section 2(1) of the CareShield Life and Long‑Term Care Act 2019; 'MediShield Life Scheme recovery body' has the meaning given by the definition of 'recovery body' in section 2(1) of the MediShield Life Scheme Act 2015." — Section 26(2), Employment Act 1968

These definitions link the Employment Act to other legislation concerning healthcare insurance schemes, enabling employers to make authorized deductions or recoveries related to these schemes. This cross-reference ensures consistency and legal clarity across statutes.

Penalties for Non-Compliance with Salary Payment Provisions

To enforce compliance, the Employment Act prescribes penalties for employers who fail to meet their salary payment obligations. These penalties escalate for repeat offenders, underscoring the importance of adherence to the law.

"Any employer who fails to pay salary in accordance with the provisions of this Part shall be guilty of an offence." — Section 34(1), Employment Act 1968

Verify Section 34 in source document →

This provision criminalizes failure to pay salary as required, providing a deterrent against non-compliance.

"Any employer who is guilty of an offence under subsection (1) for contravening section 21, 22 or 23 shall be liable on conviction — (a) to a fine of not less than $3,000 and not more than $15,000 or to imprisonment for a term not exceeding 6 months or to both; and (b) if the employer is a repeat offender, to a fine of not less than $6,000 and not more than $30,000 or to imprisonment for a term not exceeding 12 months or to both." — Section 34(2), Employment Act 1968

Verify Section 34 in source document →

This clause sets out the range of fines and imprisonment terms for first-time and repeat offenders, reflecting the gravity of salary payment breaches and encouraging employers to maintain compliance.

"For the purposes of subsection (2), a person is a repeat offender in relation to an offence under subsection (1) if the person who is convicted or found guilty of an offence under subsection (1) of contravening section 21, 22 or 23 (called the current offence) has been convicted or found guilty of an offence of contravening section 21, 22 or 23 on at least one other occasion (whether before, on or after 1 April 2014) before the date on which the person is convicted or found guilty of the current offence." — Section 34(3), Employment Act 1968

Verify Section 34 in source document →

This definition of repeat offender ensures that persistent non-compliance is met with harsher penalties, reinforcing the need for employers to adhere strictly to salary payment rules.

Cross-References to Other Legislation Affecting Salary Payment and Deductions

The Employment Act’s salary payment provisions interact with several other statutes, ensuring a comprehensive legal framework for salary management and authorized deductions.

"he or she took leave of absence to perform his or her national service under the Enlistment Act 1970," — Section 20A(1)(d), Employment Act 1968

Verify Section 20A in source document →

This cross-reference protects employees who are absent due to national service, ensuring their salary rights are preserved during such leave.

"no payment of salary or any other sum due to an employee on termination of service is to be made to the employee by the employer without the permission of the Comptroller of Income Tax under section 68(7) of the Income Tax Act 1947." — Section 24(1), Employment Act 1968

Verify Section 24 in source document →

This provision integrates tax compliance into salary payment processes, preventing employers from releasing final payments without clearance from tax authorities, thereby safeguarding government revenue.

"pursuant to a declaration made by the Comptroller of Income Tax under section 57 of the Income Tax Act 1947, the Comptroller of Property Tax under section 38 of the Property Tax Act 1960 or the Comptroller of Goods and Services Tax under section 79 of the Goods and Services Tax Act 1993 that the employer is an agent for recovery of income tax, property tax or goods and services tax (as the case may be);" — Section 26(1)(b), Employment Act 1968

Verify Section 26 in source document →

This allows employers to deduct taxes from employees’ salaries when acting as agents for tax recovery, ensuring statutory obligations are met efficiently.

"pursuant to a declaration made by a MediShield Life Scheme recovery body under section 12 of the MediShield Life Scheme Act 2015 that the employer is an agent for recovery of any outstanding premium (within the meaning of that Act) payable by the employee;" — Section 26(1)(d), Employment Act 1968

Verify Section 26 in source document →

This provision authorizes employers to recover outstanding MediShield Life premiums from employees’ salaries, facilitating premium collection and compliance with healthcare insurance requirements.

"pursuant to a declaration made by a CSHL Scheme recovery body under section 24 of the CareShield Life and Long‑Term Care Act 2019 that the employer is an agent for recovery of any outstanding premium (within the meaning of that Act) payable by the employee." — Section 26(1)(e), Employment Act 1968

Verify Section 26 in source document →

Similarly, this provision enables employers to recover CareShield Life premiums, ensuring employees’ contributions to long-term care insurance are collected appropriately.

"deductions of contributions payable by an employer on behalf of an employee under and in accordance with the provisions of the Central Provident Fund Act 1953;" — Section 27(1)(h), Employment Act 1968

Verify Section 27 in source document →

This clause authorizes deductions related to the Central Provident Fund, a mandatory social security savings scheme, ensuring employees’ contributions are properly managed.

Conclusion

The Employment Act’s provisions on salary payment are designed to protect employees’ rights to timely and full payment of wages while providing a clear legal framework for employers. The Act balances flexibility for employers with safeguards for employees, including strict timelines for payment, restrictions on deductions, and penalties for non-compliance. Cross-references to other legislation ensure that salary payment practices align with broader statutory obligations such as tax collection and social insurance contributions. Employers must therefore be diligent in adhering to these provisions to avoid legal sanctions and to foster fair employment practices.

Sections Covered in This Analysis

• Section 20(1), Employment Act 1968
• Section 20(2), Employment Act 1968
• Section 21(1), Employment Act 1968
• Section 21(2), Employment Act 1968
• Section 22, Employment Act 1968
• Section 24(1), Employment Act 1968
• Section 26(1), Employment Act 1968
• Section 26(2), Employment Act 1968
• Section 27(1)(h), Employment Act 1968
• Section 34(1), Employment Act 1968
• Section 34(2), Employment Act 1968
• Section 34(3), Employment Act 1968
• Cross-references to Enlistment Act 1970, Income Tax Act 1947, Property Tax Act 1960, Goods and Services Tax Act 1993, MediShield Life Scheme Act 2015, CareShield Life and Long-Term Care Act 2019, Central Provident Fund Act 1953

Source Documents

• Archived Copy — Litt Law CDN
• Original — Singapore Statutes Online

For the authoritative text, consult SSO.