In Collaboration with Veremark
Singapore’s thriving economy attracts numerous international professionals annually. Positioned as the financial hub of Asia, Singapore has successfully navigated through the challenges of the global financial crisis and the COVID-19 pandemic, elevating its status as a preferred destination for living, working, and conducting business.
Regarded as an attractive place to live and work, Singapore has a long list of benefits to entice workers from abroad. But to maintain order within the employment market, the government has stringent rules and laws that workers and businesses must abide by. This is why Singapore-based organisations focus on compliance and work hard to stay up-to-date with the latest guidance and recommendations when it comes to talent acquisition, recruitment, and hiring.
The governmental body responsible for employment in the country, the Ministry of Manpower, has specific regulations for businesses. This is because of the following:
To maintain a balance between domestic and international workers: Singapore is a small country with a vast economy. Because of this, there is a huge requirement for overseas workers. However, for Singapore-born employees to get a fair chance at available roles, rules are put in place to keep a fair ratio within the workforce.
To ensure the veracity of workers from overseas: Singapore is an attractive place to live and work. As a result, there is huge competition for jobs in the country. This has resulted in foreign-born workers obtaining bogus credentials from ‘diploma mills’—illegitimate businesses that issue fraudulent certificates for a fee, often without requiring any substantial coursework or academic effort from the recipient. This can result in employers inadvertently accepting candidates who do not have the right qualifications, experience, or achievements for the job.
To preserve the integrity of the country’s economy: Relating to the rise in diploma fraud, a workforce whose credentials are in question can result in mistrust in the safety of the economy, putting off potential investment opportunities from inside and outside the country. To maintain Singapore’s strength in Asia and around the world, tighter rules need to be applied to businesses.
To protect the rights of employees in Singapore: Acquiring talent can be a difficult and expensive process. However, this investment is meant to be paid off in what that worker provides to the company — in skills, productivity, and morale. To keep the workplace as happy and as safe as possible, the MoM works hard to ensure that the rights of workers are protected — so rules around conditions, breaks, working hours and fairness need to be carefully adhered to.
What are some of the Employment Regulations in Singapore?
Singapore has robust employment regulations to ensure fair and lawful practices in the labour market. Some key aspects of employment regulations in Singapore include:
Employment Act: The Employment Act is the main labour law in Singapore, providing basic terms and conditions of employment for most employees. It covers issues such as working hours, rest days, public holidays, annual leave, and termination of employment.
Central Provident Fund (CPF): Employers and employees are required to make monthly contributions to the CPF, a social security savings plan that provides retirement, healthcare, and housing benefits.
Business Regulation Requirements: Singapore business regulations encompass processes such as registering your business with the relevant government bodies, securing the required licences and permits, and complying with the established regulations and standards set forth by the government.
Work Passes: Foreigners working in Singapore are required to obtain the relevant work pass, such as the Employment Pass (EP), S Pass, or Work Permit, depending on their qualifications and the nature of their employment.
Occupational Safety and Health Act: This act ensures that the workplace is safe and healthy for employees. Employers are obligated to take measures to prevent accidents and diseases arising from the workplace.
Foreign Employee Levy: Employers who hire foreign workers are required to pay a monthly foreign worker levy, which helps regulate the number of foreign workers in Singapore.
Fair Consideration Framework (FCF): The FCF aims to ensure that local job seekers have fair opportunities in the job market. Employers are required to consider Singaporeans fairly before hiring Employment Pass holders.
Tripartite Guidelines: The Tripartite Guidelines guide various employment practices, including the issuance of employment contracts, flexible work arrangements, and the management of grievances.
Employers and employees in Singapore need to be aware of these regulations to ensure compliance and a harmonious working relationship. Additionally, specific regulations may apply to different industries and types of employment, so consulting with legal or HR professionals is advisable for a comprehensive understanding.
What issues do Singapore Businesses face when it comes to Regulatory Compliance?
All businesses have to find ways to spin a lot of plates simultaneously, whether it is cash flow, pursuing new business, budgeting, customer service and strategy. Singapore businesses, like those in any other jurisdiction, face various challenges related to regulatory compliance. Some of these include keeping on top of evolving regulations and navigating complex employment laws and ongoing administrative requirements.
While some businesses have departments dedicated to this type of activity, other organisations — especially those in high periods of growth or who are just starting — often struggle to keep up with what is required of them.
With heavy sanctions in place for non-compliance (something we’ll touch on shortly), businesses must make important decisions on managing this aspect of their operations. The question of outsourcing comes into play here, and when employers are working out the best way to bring in new talent into the business, in the safest, most legal and efficient way, the focus can turn to using a third party to help them grow their team of staff and maintain compliance.
The Role of Background Screening in Singapore
Carrying out background checks and employee verification is one example of outsourcing. While screening candidates can be done in-house by the hiring or HR department, many businesses often reach a breaking point where the scale of hires and the demands of regulatory compliance can compromise safe, efficient hiring.
It’s for this reason, that specialist background screening partners exist: these types of organisations can support businesses by taking away the administrative burden and helping to maintain stringent levels of compliance. There are other benefits too — faster turnaround times, freeing up departments to focus on other priorities, and improved levels of reporting and auditing.
And in Singapore, background screening has never been more important. With the education verification regulations and the COMPASS framework brought in 2023, businesses have a strict set of guidelines to follow to adhere to Ministry of Manpower rules. Verifying the educational qualifications of candidates from overseas is a massive concern in the country, and background screening specialists are perfectly placed to carry these out on behalf of Singapore businesses.
What are the Penalties for Non-compliance in Singapore?
In recent times, Singapore has witnessed a surge in legal measures taken against individuals and entities involved in diploma fraud:
- Prosecution of individuals: Instances have been documented where individuals using fraudulent qualifications to secure employment faced prosecution and conviction under the Penal Code, leading to fines and imprisonment.
- Action against diploma mills: Authorities have actively pursued unaccredited and deceitful educational institutions operating in Singapore, resulting in closures, fines, and other penalties.
- Employer liability: Employers who knowingly or negligently engage individuals with counterfeit qualifications may encounter legal repercussions, encompassing financial penalties and harm to their reputation.
By comprehending the legal ramifications and initiatives against diploma fraud, employers can gain a deeper understanding of the significance of vigilance and due diligence in the hiring process. This not only safeguards their businesses but also contributes to broader initiatives aimed at sustaining a qualified and authentic workforce in Singapore.
How to ensure Regulatory Compliance in Singapore
Adhering to regulatory laws in Singapore poses formidable challenges for employers, exerting detrimental effects on businesses, the job market, and the broader economy. To effectively navigate this issue, employers can adopt proactive measures by comprehending the nuances of governmental rules and the repercussions of non-adherence.
To ensure regulatory compliance in Singapore, businesses must adopt a comprehensive approach. This involves staying informed about the latest regulatory requirements in their industry and regularly checking for updates. Engaging with legal and compliance professionals is crucial for a thorough understanding of Singaporean business law. Businesses should provide training to employees on applicable regulations, fostering a culture of compliance within the organisation.
Internal audits should be conducted regularly to identify and rectify any compliance gaps, ensuring that processes align with regulatory standards. Comprehensive compliance policies tailored to the business should be developed and documented, with clear communication across the organisation. Businesses must stay vigilant for changes in regulations, adjusting policies and procedures accordingly.
Thorough background checks during the hiring process help ensure that candidates meet regulatory requirements, including verifying qualifications and work permits. The responsibility for combatting diploma fraud extends beyond governmental and educational realms; employers play a crucial role in this collective effort. By taking a proactive stance against diploma fraud, employers contribute significantly to fostering transparency, trustworthiness, and security in Singapore’s job market. This not only fortifies their businesses but also bolsters the well-being of the wider community.
In this endeavour, Veremark’s MOM Education Verification Package emerges as a valuable tool, ensuring compliance with MOM regulations—a critical aspect of recruiting skilled and reliable foreign workers. This collaborative approach between the government and accredited screening entities like Veremark aims to alleviate the adverse impact of diploma fraud on employers, preserving the integrity of Singapore’s esteemed business environment.
Leveraging technology, such as compliance management systems, can streamline processes and aid in tracking and reporting compliance activities. Networking with industry peers through participation in associations and networks provides insights into regulatory compliance practices. In the event of regulatory audits, businesses should respond promptly and transparently, addressing findings and implementing corrective actions.
Legal counsel familiar with Singaporean business law can provide valuable guidance, particularly when navigating complex regulatory issues. By adopting a proactive and vigilant stance, businesses can effectively navigate the regulatory landscape in Singapore, ensuring compliance with relevant laws and standards.
Business support is available, and the Ministry of Manpower has a wide range of accredited businesses in which to use. Whether it’s Lanturn for help in incorporation or accounting, or Veremark for background checks on candidates and existing employees — these recognised providers have been given the seal of approval by the Singapore Government.
A Whitepaper by Veremark