The Singapore Employment Act is the primary legislation governing employment relationships in Singapore, and it applies to most employees from day one. For foreign companies hiring their first local employee, the Act defines minimum entitlements around leave, termination, salary payment, and working hours that are non-negotiable. Getting these wrong is not a compliance technicality – it can trigger regulatory penalties, wrongful dismissal claims, and reputational damage before your Singapore operation has had a chance to prove itself.
TL;DR
- The Employment Act covers most employees in Singapore, but coverage varies by employee category [thinkglobal-hr.com]
- There is no statutory minimum wage in Singapore in the traditional sense, though salary floors apply to certain work pass holders [tourlife-consultants.sg]
- Annual leave, sick leave, and other entitlements are legally mandated entitlements for Singapore employees
- Wrongful dismissal in Singapore carries defined legal consequences that every employer must understand before onboarding
- Foreign companies without a local entity can use an employer of record in Singapore to hire compliantly without setting up a company first
About the Author: High Five is a hiring platform specialising in Southeast Asian markets, with deep expertise in Singapore’s compliance landscape, employment regulations, and the practical realities of building teams across the region. High Five supports founders and operators at fast-growing companies navigating their first hires in Singapore and across Southeast Asia.
What Does the Singapore Employment Act Actually Cover?
The Employment Act is Singapore’s foundational employment law, and understanding its scope is the starting point for any foreign company entering the market. The Act covers most employees working under a contract of service in Singapore, but coverage is not uniform across all employee types [thinkglobal-hr.com].
Key coverage distinctions:
- Workmen (manual workers earning up to a defined monthly salary threshold) receive the most comprehensive protections, including specific rules on overtime pay
- Employees earning above the salary threshold are covered for core provisions like annual leave and termination notice, but certain Part IV protections on hours and overtime do not apply
- Managers and executives are covered for core entitlements, but historically had fewer protections, and this has been progressively expanded [tourlife-consultants.sg]
The practical implication for foreign employers is that you cannot apply one uniform internal HR policy across all Singapore hires. Role type and salary level determine which rules apply, and misjudging this creates legal exposure.
Is There a Singapore Minimum Wage in 2026?
Singapore does not operate a universal minimum wage in the way most Western markets do. This is one of the most common misconceptions foreign employers bring into the market, and it matters for how you structure compensation.
What exists instead:
- A Progressive Wage Model (PWM) that mandates minimum pay for specific sectors including cleaning, security, landscape, retail, food services, and waste management
- Work pass salary thresholds that function as de facto minimums for foreign employees – the Employment Pass requires a minimum monthly salary of S$5,600 for most candidates (higher for financial services), and the S Pass threshold sits at S$3,300 for most sectors [tourlife-consultants.sg]
- Local Qualifying Salary rules that set a minimum salary level a local employee must earn for a company to count them toward its foreign worker quota
For roles not covered by the PWM, there is no statutory minimum wage floor for local employees in 2026 [tourlife-consultants.sg]. Compensation is set by market and negotiation, which is why benchmarking against local market data is essential before you make your first offer.
What Is Singapore Annual Leave Entitlement?
Singapore annual leave entitlement is straightforward but often underestimated by employers used to jurisdictions with lower statutory minimums. Under the Employment Act, employees are entitled to paid annual leave from the start of their employment, with entitlement increasing with tenure.
Annual leave entitlement by years of service:
| Years of Service | Annual Leave Days |
|---|---|
| 1st year | 7 days |
| 2nd year | 8 days |
| 3rd year | 9 days |
| 4th year | 10 days |
| 5th year | 11 days |
| 6th year | 12 days |
| 7th year | 13 days |
| 8th year and beyond | 14 days |
Beyond annual leave, the Act mandates sick leave (outpatient and hospitalisation), public holidays (11 gazetted days), and maternity and paternity leave under separate legislation. Foreign employers who benchmark only against annual leave minimums often underbuild their total leave budgets.
What Counts as Wrongful Dismissal in Singapore?
Building on the leave and entitlements framework above, the harder question for most foreign employers is what happens at the end of employment. Wrongful dismissal in Singapore is a defined legal concept, not a vague complaint mechanism, and understanding it before you hire is far better than learning it during a dispute.
Wrongful dismissal occurs when an employer terminates an employee without just cause or excuse. Since 2019, all employees covered by the Employment Act have had the right to bring a wrongful dismissal claim to the Employment Claims Tribunal [nortonrosefulbright.com].
Grounds that typically support a wrongful dismissal claim:
- Dismissal motivated by discriminatory reasons (gender, race, religion, age)
- Retaliation for the employee exercising a statutory right (e.g., filing a complaint with MOM)
- Termination without following the contractually agreed notice provisions
- Summary dismissal (without notice) in situations that do not meet the legal threshold for misconduct
What protects employers: A clearly documented performance improvement process, written records of misconduct or capability issues, and termination letters that reference objective cause. Foreign companies that import “at-will” employment assumptions from US markets are particularly exposed here – Singapore law does not recognise at-will employment.
Do Foreign Companies Need a Local Entity to Hire in Singapore?
A related but distinct question from the compliance obligations above is the structural one: do you need a Singapore-registered company to hire a local employee? The short answer is no, but the mechanism matters.
Foreign companies without a local entity can hire Singapore-based employees through an employer of record in Singapore. An EOR is a locally incorporated entity that employs workers on your behalf, handling payroll, CPF contributions (Singapore’s mandatory pension scheme), tax compliance, and Employment Act obligations, while the employee works for your business operationally [aniday.com].
This is a common entry point for foreign companies testing the Singapore market or building a small team before committing to a full incorporation. The EOR model shifts compliance responsibility to a specialist entity while giving you full control over who you hire and what they work on.
Stepping back from the structural question, the most important principle is this: whether you hire directly or through an EOR, the Employment Act entitlements described above apply to your employees regardless of how the employment relationship is structured.
Frequently Asked Questions
Does the Singapore Employment Act apply to foreign employees? Yes. The Act applies to employees working in Singapore under a contract of service, regardless of nationality, provided they hold a valid work pass [thinkglobal-hr.com].
Is CPF mandatory for Singapore employees? CPF contributions are mandatory for Singapore citizens and Permanent Residents. Foreign employees on Employment Passes or S Passes are not subject to CPF [papayaglobal.com].
How much notice is required for termination in Singapore? Notice period is typically specified in the employment contract. If not stated, the Employment Act prescribes minimum notice periods based on length of service, ranging from one day to four weeks.
Can an employer dismiss an employee on probation without notice? Probationary employees still have Employment Act protections. Summary dismissal without notice requires the same standard of misconduct as for confirmed employees.
What is the Fair Consideration Framework? The Fair Consideration Framework requires employers to consider Singaporeans fairly before hiring foreign professionals. It includes mandatory job advertising on MyCareersFuture for at least 14 days for most roles before applying for an Employment Pass [rafflescorporateservices.com].
What are the penalties for non-compliance with the Employment Act? Penalties range from fines to criminal prosecution depending on the breach. Hiring foreign workers without valid work passes can result in jail time and significant fines [thinkglobal-hr.com].
Can an employer change employment terms unilaterally? No. Material changes to employment terms require employee consent. Imposing changes without agreement can constitute a breach of contract.
About High Five
High Five is a hiring platform built for founders and operators expanding into Southeast Asia. The platform combines AI sourcing with human expert review to surface strong candidates, with no fees and no lock-in. High Five supports companies hiring across Singapore, Indonesia, Vietnam, Malaysia, and the Philippines, and publishes extensive resources on employment compliance, EOR, payroll, and market entry to help teams hire with confidence in the region.
If you are preparing to hire your first employee in Singapore and want to make sure the process is built on solid legal and operational foundations, get in touch with the High Five team to learn how the platform can support your search.
