MARKET FAQ

The main steps are to confirm the candidate’s right to work, recruit fairly, comply with any applicable job advertising requirement, and prepare a contract with employment terms that comply with Singapore statutory requirements.

1. It is a criminal offence to employ a foreign employee without a valid work pass. 2. While employers and employees are generally free to negotiate the terms of the employment contract, the Employment Act 1968 ("Employment Act") contains certain minimum requirements that all employment contracts must adhere to. Any terms in an employment contract that are less favourable than these minimum requirements will be considered null and void. Minimum requirements cover items such as annual leave, sick leave, hospitalisation leave, salary period and notice period. In addition, workmen earning a basic monthly salary of up to S$4,500 and other employees (other than managers and executives) earning a basic monthly salary of up to S$2,600 are covered by Part 4 of the Employment Act, which imposes further statutory requirements on items including overtime pay, maximum hours of overtime, break times and maximum hours of work.

1. Your firm will need to apply for a work pass on behalf of the candidate if they are not a Singapore citizen or permanent resident in Singapore. Common work passes include S Passes for skilled workers, work permits for skilled and semi-skilled migrant workers in certain sectors including construction and manufacturing, and Employment Passes (EP) for foreign professionals, managers, executives and technicians (PMETs). Certain work passes require the candidate to earn a minimum amount – for example, a candidate is only eligible for an EP if their fixed monthly salary is comparable to the top one-third of PMET salaries by age, which starts from S$5,600 (~NT$139,300) and increases progressively with age, up to S$10,700 (~NT$267,000) for employees aged 45 and above. These figures apply to sectors other than financial services, where the qualifying salary is higher. The Ministry of Manpower has announced that, for new applications from 1 January 2027, the qualifying salary for sectors other than financial services will rise to S$6,000, up to S$11,500 for candidates aged 45 and above. 2. Singapore employers are expected to follow the Tripartite Guidelines on Fair Employment Practices. When recruiting, employees must be selected on the basis of merit (such as skills, experience or ability to perform the job), and regardless of age, race, gender, religion, marital status and family responsibilities, or disability. All employers must practice fair hiring. 3. Employers who intend to hire employees on an EP or S Pass must advertise the role for at least 14 consecutive days on the government's job portal (MyCareersFuture) and fairly consider all candidates. According to the Ministry of Manpower, firms with fewer than 10 employees, vacancies with a fixed monthly salary of S$22,500 and above, and short-term vacancies of not more than one month are among those exempt from the advertising requirement, but all employers must still practise fair hiring. 4. While an employment contract may be agreed orally or in writing, key employment terms (KETs) in writing must be provided to employees. The KETs include the full names of the employer and employee, job title, main duties and responsibilities, start date, salary, salary period and other salary-related components, fixed allowances and deductions, working arrangements, leave, notice period and any probation period, and medical benefits.

An employee in Singapore has the statutory right to file a claim against their employer under the Employment Claims Act 2016 ("ECA") if the claim relates to payment of salary or wrongful dismissal. Such claims will be adjudicated based on local employment laws and contractual terms.

1. An ECA claim must first undergo mandatory mediation at the Tripartite Alliance for Dispute Management before they can be escalated to the Employment Claims Tribunals. 2. If the employment contract does not specify the governing law and forum of dispute, the applicable law and the court’s jurisdiction will be determined under the relevant conflict of laws rules and the facts connecting the employment to each country. Singapore will be a significant connection where the employee habitually performs the work in Singapore.

1. In relation to non-ECA claims, the employment contract can specify the governing law and the forum where the dispute will be heard, such as in the Singapore Courts or before an arbitral tribunal. 2. Regardless of the governing law of the contract, if the employee is based in Singapore, the employment arrangement must comply with Singapore statutory obligations, including the requirements set out in Q1 of this column.

These arrangements may be suitable depending on the nature of the jobs offered. However, please note that these arrangements should only be used for Singaporean workers. If you do not have a Singapore entity, it will generally not be possible for a non-Singaporean (i.e. an individual who is not a Singaporean citizen or Permanent Resident) to work for you out of Singapore.

1. Non-Singaporeans are not allowed to work in Singapore unless they have a valid work pass. As work passes are only granted to foreigners to work for Singapore-based companies, it will generally not be possible to engage a non-Singaporean if you do not have a Singapore entity. 2. It is not permissible to use an EOR to sponsor a non-Singaporean who will in substance work for your firm based in Taiwan. The Ministry of Manpower (MOM) has expressly stated that it is an offence if an EOR obtains a Singapore work pass for that purpose.

1. Direct employment. You can directly employ someone working in Singapore without incorporating a Singapore subsidiary. However, you must ensure compliance with applicable Singapore statutory obligations, payroll administration and Central Provident Fund (CPF) contributions where applicable. 2. Independent contracting. This is appropriate for an individual engaged to provide services, where the individual has control and autonomy over how the work is performed. As independent contractors are not considered employees, their contracts will not need to comply with the Employment Act 1968's statutory requirements. The nature of the work will determine whether an individual is an independent contractor. A business should not label an individual as an independent contractor simply to avoid applicable Singapore statutory obligations associated with an employment relationship. As discussed in Q4 of this column, the term used to describe the contract is not decisive and Singapore law will ultimately consider the substance of the relationship to determine if it is an employment or independent contractor relationship. 3. Worker Dispatch. In a worker dispatch arrangement, your company (Y) engages workers which are employed by another company (X) for specific tasks or a project. Assuming that these workers are under X's control – i.e. X controls the service delivery – you will not be considered the employer of these workers. You should enter into a private contract with X to govern the terms of this arrangement. This arrangement may be suitable if you only require very limited resources for a well-defined and specific project. 4. Employers of Record (EOR). Under the EOR model, an EOR in Singapore hires and pays employees on behalf of other firms, including foreign firms without a legal presence in Singapore. If you are engaging the services of Singapore citizens or Permanent Residents before establishing a local entity, you may engage a Singapore EOR to employ them under contracts of service while they work for your business. The EOR, as their employer, is responsible for employment obligations such as salary, applicable CPF contributions and statutory entitlements. Your agreement with the EOR should specify who gives day-to-day instructions, approves leave, handles grievances and makes decisions on discipline or termination.

The nature of the work (and not the label given to it) will determine whether an individual is an independent contractor.

For example, if your firm regularly assigns work under close supervision, for a fixed monthly fee, and the individual is expected to work for your firm exclusively, this is likely to be classified as an employee-employer relationship regardless of how the contract is described.

To determine whether a person is an independent contractor or employee, Singapore law will consider relevant factors holistically, such as: 1. The extent to which the hiring company controls how the work is done Whether the company is legally bound to provide work? 2. Whether the individual is obliged to perform the work assigned by the company 3. Whether the company or the individual provides the tools and equipment to carry out the work 4. Whether the individual earns a regular fixed salary or is paid based on the amount of work done 5. Whether the individual is obliged to work for the company exclusively, or is allowed to work for other companies

If there is a valid offer and acceptance, your firm cannot "withdraw" the offer unless the securing of funding was expressly listed as a condition of the offer in the employment contract.

1. Where a contract has been formed, subsequent "withdrawal" by any party, including your firm will be considered a breach of contract and damages will be payable. Damages are likely to be calculated with reference to the notice period of the employee under the employment contract. 2. Under Singapore law, non-compete clauses which operate post-employment are not enforceable unless the employer proves that it (1) protects a legitimate proprietary interest of the employer e.g., client and trade connections which the employee has personal knowledge and influence over, and trade secrets; (2) is reasonable between the parties (3) is reasonable in reference to the interest of the public. 3. In this case, as the candidate has not even joined the company, it is unlikely that they would have access to any company confidential information, or have had a chance to develop any client and trade connections. In this regard, it is unlikely that the company will be able to show that there is any legitimate proprietary interest to protect, which will make the non-compete clause very difficult to enforce. For the same reason, it will be difficult for the company to enforce the confidentiality undertakings.

1. Whether you can withdraw the offer will depend on how the "formal offer" was made and how the candidate accepted. For example, if the firm made an offer by providing the candidate with a written employment contract, and the candidate has accepted it by signing the contract, then the employment contract is treated as valid and binding. If however, only a verbal offer was made by the firm and the employee agrees on the phone, but the employer subsequently changes his mind, there will be a question of whether the parties concluded a valid contract orally. 2. If the hire depends on your firm securing funding, list the securing of funding expressly as a condition of the offer in the employment contract.