Recruit, understand the labour law and welfare system in Singapore.
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To develop your structure in Singapore, it is common to call upon the hire of a foreign employee (from the headquarters for example). Then, the next step will be work permits and visas for the employee’s family.
Foreign employees can come to work in Singapore under two types of contract: secondment and expatriation.
An employee on secondment (when a company headquartered in France and employing him) is being sent abroad from 3 months to 3 years. The employee remains in the company’s staff count and payroll. He keeps his original employment contract. He remains therefore legally subordinated to his current employer.
An employee can live abroad with either:
- An ‘’expatriated’’ employment contract (according to the French social security’s meaning). The employee is therefore subject to the French law for a determined and renewable period with the condition of the Employment Pass’ (EP) possession. In Singapore the employee will be subjected to the enrolment in the Caisse des Français de l'Etranger’s plan (CFE) to avoid losing his rights. Social security conditions are defined in the expatriation contract (CFE + Supplementary Health Insurance + Pension rights + Unemployment Insurance).
- A local employment contract of a limited or unlimited period: subjected to the condition of obtaining and renewing the EP. The employee does not benefit anymore from the French social security but only from the social security scheme of the chosen country.
It is to note that for employees in possession of an EP, there is no employer and employee social contribution to pay. Only a contribution to the Skill Development Levy’s (SDL), a professional training fund, is mandatory.
For expatriates, the employer has no obligation to their social security and health insurance. However the employer can partially or completely contribute to the expatriate’s social protection.
The expatriate can choose his own social protection (health and critical illness, life, unemployment insurance, and retirement). He can choose between the CFE and a supplementary health insurance, or subscribe only to an additional insurance.
Working conditions are defined in the employee’s employment contract and supplemented by the Handbook (the company’s policies and procedure). From Anglo-Saxon influence, the labour market is less regulated than the French one and many French clauses need to be thought of for the Singapore contract.
The Singapore welfare system: The CPF
Singaporean employees, foreign Permanent Residents (PRs) and their employers contribute to the Central Provident Fund (CPF).
The CPF draws on the mandatory contribution of employees and self-employed. They can withdraw their funds to cover expenditure related to retirement, permanent disability, home ownership and health care.
CPF is funded by the employee’s payments and the employer’s monthly contributions.
It must be noted that the employers must pay a ‘’Foreign Worker Levy’’ for less qualified foreign workers. A monthly tax of 300 SGD to 950 SGD per person is estimated according to the sector (construction, services, maritime, etc.) and the worker’s country of origin.
Recruiting is an essential and recurring issue in our exchanges with companies. It is because the development and sustainability of an entity are often based on the capacity of Singapore offering the profiles wanted. Visit our Human Resources (HR) Department for a comprehensive study of your HR project in Singapore.
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