Singapore is known for its strict and complex labor laws, which can pose a challenge for many businesses operating in the country. HR compliance is not only a legal obligation, but also a key factor in maintaining a positive reputation and avoiding costly fines or lawsuits.
However, keeping up with the latest regulations and requirements can be time-consuming and tedious, especially for small and medium-sized enterprises (SMEs) that may not have a dedicated HR team or sufficient resources. That’s where HR software can help.
Here are six common penalties that you can avoid by using HR software in Singapore:
Late or inaccurate payment of salary
According to the Employment Act, employers must pay their employees within seven days after the end of the salary period, unless otherwise agreed in writing. Employers must also issue itemized payslips to their employees at least once a month. Failure to do so can result in a fine of up to $15,000 or imprisonment of up to six months, or both. HR software can help you automate your payroll calculations and deductions, as well as generate and send payslips electronically to your employees.
Non-compliance with statutory contributions
Employers in Singapore are required to contribute to the Central Provident Fund (CPF), the Skills Development Levy (SDL), and the Ethnic Integration Fund (EIF) for their employees. These contributions are based on the employee’s age, citizenship, salary, and other factors. Employers who fail to make these contributions on time or in full can face a fine of up to $10,000 or imprisonment of up to seven years, or both.
HR software can help you calculate and remit these contributions accurately and efficiently, as well as generate and submit the necessary forms and reports.
Non-compliance with leave entitlements.
Employees in Singapore are entitled to various types of leave, such as annual leave, sick leave, maternity leave, paternity leave, childcare leave, and more. These leave entitlements are governed by the Employment Act, the Child Development Co-Savings Act, and other relevant laws. Employers who deny or reduce these leave entitlements without valid reasons can face a fine of up to $5,000 or imprisonment of up to six months, or both.
HR software help you manage your employees’ leave applications and approvals, as well as track their leave balances and usage.
Non-compliance with work injury compensation
Employees who suffer work-related injuries or illnesses are entitled to claim work injury compensation from their employers under the Work Injury Compensation Act (WICA). Employers who fail to report such cases to the Ministry of Manpower (MOM) within 10 days or fail to pay the compensation within 21 days can face a fine of up to $10,000 or imprisonment of up to one year, or both. HR software can help you record and report such cases promptly and accurately, as well as calculate and pay the compensation accordingly.
Non-compliance with data protection
Employers who collect, use, disclose, or store personal data of their employees must comply with the Personal Data Protection Act (PDPA), which aims to protect the privacy and security of individuals’ data. Employers who breach the PDPA can face a fine of up to $1 million or an order to stop collecting or using the data. HR software can help you safeguard your employees’ data by encrypting it, restricting access to it, and deleting it when no longer needed.
Non-compliance with fair employment practices
Employers who discriminate against their employees on the basis of age, race, gender, religion, marital status, family responsibilities, or disability can face legal action under the Fair Consideration Framework (FCF), which promotes fair and merit-based hiring and employment practices. Employers who violate the FCF can face a fine of up to $20,000 or a restriction from hiring foreign workers. HR software can help you avoid discrimination by standardizing your recruitment and performance evaluation processes, as well as providing diversity and inclusion training for your staff.
As you can see, HR compliance is not something that you can afford to ignore or neglect in Singapore. By using HR software, you can avoid these six penalties and more importantly ensure that your business is operating ethically and responsibly to avoid penalties.
HRMLabs.com offers a comprehensive HR software solution that can streamline your HR processes, ensuring compliance with Singapore’s labor laws. With HRMLabs.com, you can automate your CPF contributions, ensuring accurate and timely payments. The software also simplifies SDL payments and other payroll processes, reducing the risk of errors and penalties. By leveraging technology, you can navigate the complexities of HR compliance with ease, saving time and resources.
Don’t let HR compliance become a burden for your business. Contact HRMLabs now!