NWC proposes increase to minimum pay

by Miklos Bolza27 May 2016
Next week, the National Wages Council (NWC) is expected to recommend increased minimum pay levels for low wage workers.
 
The suggestion is now being considered by the government and will come into effect from 1 July if approved.
 
The NWC has already increased the minimum built-in pay by $60 in 2013, 2014 and again in 2015. Last year, it raised the salary bar to $1,100 as well.

The size of the latest pay rise is currently unknown. If it is approved next week, it won’t be binding for businesses. In fact, only six out of 10 employers in the private sector gave low wage workers the recommended pay hike of $60 in 2016, Minister for Manpower Lim Swee Say said in January.
 
Erman Tan, president of the Singapore Human Resources Institute (SHRI), told HRD that there were two scenarios for HR professionals if the proposed pay rise comes into play.
 
Taking up the wage increase
 
For employers open to bringing this special wage increase on board, HR should focus on the needs of these low wage workers through better training and development, Tan said.
 
“It will be time for HR professionals to look into better career restructuring through training and development, mentorships, on-the-job training, and career path design.”
 
The final goal will be to increase the value-add of these low wage workers given that they will ultimately be paid more, he added.
 
“This will justify the wage increases so that productivity and wage adjustments will grow actively together hand-in-hand.”
 
Resisting the wage increase
 
Firms currently suffering in the worldwide economic slowdown might be a bit more reluctant to pay low wage workers more, Tan said. This could be because of organisational restructuring, employee retrenchments or recent salary adjustments of higher wage workers.
 
“HR would have to look into the long-term needs of the organisation during restructuring to see how to best deploy the workforce, especially the low wage workers.”
 
Again, training comes into play here, allowing HR to develop and redeploy low wage staff into higher positions during the corporate restructuring.
 
“While they may not receive the proposed increased wages, at least they’ll be given fair career growth opportunities in the long run,” he said.
 
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