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Workforce Flexibility and Government Incentives in times of Covid-19 - Singapore

Short-term State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

No

However, the Infectious Diseases (Workplace Measures to Prevent Spread of COVID-19) Regulations 2020 (the “COVID-19 Prevention Regulations”), came into force on 1 April 2020. It requires, among other things, employers, principals (including persons who engage contractors or subcontractors) to implement certain COVID-19 prevention measures between 2 April 2020 and 30 April 2020 (both dates inclusive) (the “Control Period”) in respect of their workers, such as requiring employees to work from home where feasible, or implementing for split team arrangements. For roles requiring workers to be physically present on company sites, employers should ensure wider physical spacing of at least 1m between work stations and seats in meeting rooms, pantries, rest areas and other congregation points. Please refer to the answers to question 1 - Batch 1 for more details on what measures must be taken to prevent the spread of COVID-19 in the workplace.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

While the Singapore government has set aside at least $4 bn to support businesses during this period, it has not yet announced details on specific programmes to help businesses that have closed totally or partially for a certain time period.

On 26 March 2020, the Singapore government announced an additional $48 bn relief package to support businesses generally through the following measures:

  • Enhanced Jobs Support Scheme: The Singapore government will help employers by paying 25% (businesses in the aviation and tourism sector as well as food services sector will receive higher support of 75% and 50% respectively) on the first $4,600 of monthly salaries of local employees on the employer’s Central Provident Fund (“CPF”) payroll till end 2020;
  • Enhanced Wage Credit Scheme: The Singapore government will increase the amount that they co-fund for wage increases in 2019 and 2020, from 15% and 10% respectively to 20% and 15% respectively for Singapore Citizen employees who were paid CPF contributions for at least three calendar months in the year;
  • Deferred Income Tax Payments: All corporate income tax payments are automatically deferred for three months;
  • Freeze on all Government Fees and Charges for one year, from 01 April 2020 to 31 March 2021;
  • Enhanced Property Tax Rebate for Non-Residential Properties: Certain non-residential properties such as hotels, convention centres, and offices, will enjoy property tax rebates of between 30% and 100%;
  • Enhanced Rental Waivers: Stallholders of hawker centres and markets will be granted three months’ rental waiver, while commercial and other non-residential tenants of government properties will be granted up to two months’ rental waiver;
  • Enterprise Financing Scheme (“EFS”): The Government has raised the maximum loan quantum for the (1) EFS-SME Working Capital Loan, which provides loans to Singapore-based small and medium enterprises for financing their operational cash flow needs from $600,000 to $1,000,000 per borrower, and (2) EFS-Trade Loan, which provides loans to Singapore-based enterprises for trade financing needs from $5,000,000 to $10,000,000 per borrower group;
  • Loan Insurance Scheme: The Government will increase its subsidy on insurance premiums for loan defaults from 50% to 80%;
  • Temporary Bridging Loan Programme: Provides loans as additional cash flow support for eligible enterprises from all sectors for one year, up to a maximum loan quantum of $5,000,000; and
  • Sector Specific Support Programmes: There are support packages specific to the aviation, tourism, land transport, cruise ship and regional ferry operators, and arts sectors.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

A. LOA/SHN Support Programme

Government support, known as the LOA/SHN Support Programme, is available for employers whose workers have been affected by quarantine measures (such as a SHN or mandatory leave of absence ("LOA")) in Singapore. Workers returning to Singapore with travel history in the last 14 days to the following countries will be subject to a 14-day SHN or LOA:

  • Mainland China (excluding Hubei province) from 31 January 2020, 6pm (for workers in the healthcare, education and eldercare sectors, the worker must be placed on an LOA/SHN after returning from China on or after 14 January 2020);
  • Daegu city or Cheongdo county (Republic of Korea) from 26 February 2020, 11:59pm;
  • Iran, northern Italy, the Republic of Korea from 04 March 2020, 11:59pm;
  • Italy, France, Spain and Germany from 15 March 2020, 11:59pm;
  • Japan, Switzerland, the UK, or any ASEAN country from 16 March 2020, 11:59pm.

From 20 March 2020, 11:59pm, all travellers entering Singapore will be subject to a 14-day SHN.

Eligibility

For an employer to qualify for the LOA/SHN Support Programme, the affected worker must:

  • be a Singapore citizen, permanent resident, or work pass holder; and
  • be placed on an LOA or SHN upon returning from certain overseas destinations.

However, the employer will not be eligible for the LOA/SHN Support Programme if:

  • the worker is able to perform work remotely;
  • the worker was no longer in employment with the employer at the relevant travel advisory dates, or for the full duration of the LOA/SHN;
  • the employer did not pay the worker during the LOA/SHN period, or required him to use his original paid or sick leave entitlement;
  • the worker did not comply with all the LOA/SHN requirements;
  • in cases involving foreign workers, the employer did not obtain entry approval from MOM for the foreign worker to enter Singapore; or
  • the affected worker travelled to:
    • Mainland China after 28 January 2020;
    • South Korea (Daegu city or Cheongdo county) after 26 February 2020;
    • South Korea, Iran, or northern Italy after 04 March 2020;
    • Italy, France, Spain or Germany after 15 March 2020;
    • ASEAN countries, Japan, the UK or Switzerland after 16 March 2020; or
    • Any country after 20 March 2020.

Employers whose employees were not subject to a mandatory SHN, but were placed on a company-LOA are also eligible for relief under the LOA/SHN Support Program, provided the following conditions are met:

  • The employee returned to Singapore between 14 March 2020 and 20 March 2020;
  • Must not have commenced travel to:
    • Mainland China after 31 January 2020;
    • South Korea (Daegu city or Cheongdo county) after 26 February 2020;
    • South Korea, Iran or northern Italy after 04 March 2020;
    • Italy, France, Spain or Germany after 15 March 2020;
    • ASEAN countries, Japan, the United Kingdom or Switzerland after 16 March 2020.
  • The employee is must be unable to perform work remotely during the company-LOA or self-imposed LOA period; and
  • The employee must have served at least seven days of company-LOA or self-imposed LOA.

Employers that choose to implement company-LOA for Malaysian workers will be eligible for LOA support, provided that they do not also tap on the temporary housing support for employers affected by Malaysia’s Movement Control Order for the same Malaysian workers.

Benefits

Under the LOA/SHN Support Programme, employers will receive $100 daily per affected worker for the required duration of LOA or SHN granted to the worker. Employers who employ foreign workers will also automatically qualify for foreign worker levy waiver for affected foreign workers for the LOA or SHN period.For workers that served fewer than 14 days of company-LOA or self-imposed LOA, the total amount of LOA support that employers can receive will be capped at $700.

B. Temporary Housing Support ("THS") for employers affected by Malaysia’s Movement Control Order

With the implementation of a Movement Control Order which bans Malaysia citizens from going overseas and non-Malaysia citizens from entering Malaysia between 18 March 2020 and 31 March 2020, the MOM has introduced THS to help employers defray the additional costs of housing affected workers in short-term housing.

Under the THS, employers will receive $50 per affected worker per night, capped at 14 nights, to cover the extra housing costs incurred.

Employers should note that the THS will not be extended beyond 31 March 2020.

Criteria

The affected worker(s) must:

  • Be Singapore Citizens (SC), Permanent Residents (PR) or work pass holders who are Malaysia citizens;
  • Reside in Malaysia and commute frequently to Singapore; and
  • Be housed in Singapore in proper accommodation, such as hotels, dormitories or rented accommodation (HDB flats and private residential property), latest by 25 March 2020.

C. Three-month Extension of Levy Payment Timeline for SMEs

MOM announced on 24 March 2020 that it will provide SMEs (defined as companies incorporated in Singapore employing not more than 200 workers) with an additional three months to make foreign worker levy payments. The current arrangement is that the foreign worker levy incurred in the any month is due for payment by the 14th of the following month. Employers who fail to make payment on the due date will have their new and renewal work pass applications rejected. Two consecutive months of late or non-payment of levies will result in all existing work passes being revoked.

D. Levy (FWL) Waiver For Up To 90 Days For Foreign Workers On Overseas Leave:

Previously, MOM allowed for a levy waiver for up to 60 days for foreign workers who go on overseas home leave for at least seven consecutive days. MOM announced on 24 March 2020 that it will extend the levy waiver period to up to 90 days with immediate effect for foreign workers who are currently on overseas leave. This extended period of levy waiver will also apply to employers who send their foreign workers home from now till end 2020.

Businesses that cannot resume operations on-site after the Circuit Breaker period will receive a foreign worker levy and a rebate for up to 2 months. This is in addition to the FWL waiver and FWL rebate of S$750 granted in April and May. The waiver will be 100% in June, and 50% in July. The rebate will be S$750 in June, and S$375 in July.

E. Man-Year Entitlement (MYE) Refund For Construction Firms:

Currently, any unused Man-Year Entitlements ("MYE") are forfeited. The MOM announced on 24 March 2020 that from 01 April 2020 onwards, any unutilised MYEs will be refunded. Affected firms can apply to the Building Construction Authority ("BCA") of Singapore for the MYE refund. BCA will provide more details on the application process.

F. Enhanced Jobs Support Scheme:

The Singapore government will help employers by paying between 25% to 75% (depending on when the business is allowed to resume operations and its sector) on the first $4,600 of monthly salaries of local employees on the employer’s Central Provident Fund (“CPF”) payroll till August 2020.

Criteria

All employers who have made CPF contributions for their resident (Singapore Citizen and Permanent Resident) employees will qualify for the pay-out.

This is with the exception of certain employers, such as unregistered local/foreign entities, representative offices of foreign companies, financial representative offices, international organizations, and entities that pay CPF but are not registered in Singapore. Note that wages paid to business owners (including sole proprietors of a sole proprietorship or partners of a partnership) or employers trading in their own personal capacity (such as hawkers with no UEN number) will not be eligible for the pay-out;

G. Enhanced Wage Credit Scheme (“WCS”)

The Singapore government will increase the amount that they co-fund for wage increases in 2019 and 2020, from 15% and 10% respectively to 20% and 15% respectively for Singapore Citizen employees who were paid CPF contributions for at least three calendar months in the year.

Criteria

Employers will be eligible for the WCS if they gave wage increases in a Qualifying Year (i.e. any year from 2013 to 2020) to Singapore Citizen employees who:

  • Received CPF contributions from a single employer for at least three calendar months (which need not be continuous) in the year preceding the Qualifying Year;
  • Have been on the employer's payroll for at least three calendar months (which need not be continuous) in the Qualifying Year (i.e. employer must have paid employee CPF contributions for at least three calendar months (which need not be continuous) in the Qualifying Year);
  • Have at least $50 gross monthly wage increase (up to $5,000); and
  • Must not also be the business owner of the same entity (i.e. sole proprietor of the sole proprietorship, or a partner of the partnership, or both a shareholder and director of a company);

However, local government agencies, international organisations and businesses not registered in Singapore do not qualify for WCS.

An employer is not eligible for a pay-out under any of the circumstances below:

  • The employer is an entity that has no substantial trade or business;
  • The employer had given, in the Inland Revenue Authority of Singapore’s (“IRAS”) opinion, false or misleading information to IRAS in order to obtain a pay-out or a higher amount of pay-out;
  • The employer (either singly or with another person) had used, in IRAS' opinion, one or more artificial, contrived or fraudulent steps in order to obtain a pay-out or a higher amount of pay-out; or

  • The employer was convicted in the qualifying or preceding year for making CPF contributions to Singaporeans who were not actively employed by the firm.
  • An employer is not eligible for a pay-out for a wage increase given to a particular employee who:

  • Did not carry out any substantive work for the employer;
  • Effectively controls the employer (i.e. controls decision making power and management of the business or company);
  • If the total wages paid by an employer for a period is not commensurate with the volume or nature of activity carried out by the employer in that period, then the employer is only eligible for an amount of pay-out that, in IRAS' opinion, corresponds to the increase in the total wages that is commensurate with such volume or nature of activity;

If the total wages paid by an employer to a particular employee for a period is not commensurate with the volume or nature of work carried out by the employee in that period for the employer, then the employer is only eligible, in respect of that employee, for an amount of pay-out that, in IRAS' opinion, corresponds to the increase in the total wages paid to that employee for that period that is commensurate with such volume or nature of work; or

If an employer fails to give to IRAS, by the time specified by IRAS, any information requested by IRAS for the purpose of determining the employer's eligibility for a pay-out or the amount of pay-out the employer is eligible for, with respect to one or more employees, then the employer will not be given the pay-out for these employees.

H. Deferment of Higher CPF Contribution Rates

Increases in CPF contribution rates for senior workers have been deferred by 1 year from 1 January 2021 to 1 January 2022

I. Expanding Rental Relief for SMEs

A government cash grant will be given to offset the rental costs of SME tenants (with not more than S$100 million in annual turnover based on the corporate and individual income tax returns for YA2019) of commercial and non-residential properties, calculated based on the annual values of properties for 2020. This can be between 0.64-0.8 months’ of rent. This cash grant will be automatically disbursed by the IRAS to property owners of qualifying SME tenants from end July. Landlords are required to pass on the new cash grant benefit to their qualifying SME tenants.

J. Enhancing financing support for startups

To support promising startups, S$285 million will be set aside to catalyse and crowd in another S$285 million in matching private investments. This is in addition to the S$300 million set aside under the Unity Budget for deep-tech startups

K. Mandatory Rental Waivers by Landlords

A new Bill will be introduced mandating that landlords grant rental waivers to qualifying SME tenants. SME tenants of commercial properties who have suffered a significant revenue drop will benefit from a total of 4 months of rental relief shared equally between the Government and landlords.

L. Rental Relief for Government Tenants

Tenants of government agencies will get a rental waiver of between one to four months, depending on the type of property they are renting.

M. Support for E-Payments

A bonus of S$300 per month over 5 months will be provided to encourage stallholders in hawker centres, wet markets, coffee shops and industrial canteens to adopt e-payments.

N. Support to digitalise basic payment and invoicing functions

Eligible businesses in the F&B and retail sectors can receive a payout of up to S$5,000 from the Digital Resilience Bonus if they adopt PayNow Corporate and e-invoicing, as well as business process or e-commerce solutions.

O. Support for more advanced digital tools

&B and retail businesses will have an additional tier of S$5,000 as part of the Digital Resilience Bonus when they adopt advanced digital tools (such as establishing a digital presence, or adopting data-driven operations)(Note: Measures H to O were only introduced on 26 May 2020. Details on qualification and application are not available at the time of writing)

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

A. LOA/SHN Support Programme

Employers can apply for the LOA/SHN Support Program after their worker completes their LOA/SHN, but must do so within 90 days from the last day of the worker's LOA or SHN via this URL (correct as of 23 March 2020):

https://form.gov.sg/#!/5e71f96f5ec7a000119f8595

Employers will have to submit the following documents:

  • Proof of employment for affected worker(s):
    • Itemised pay slip(s) for salary payment during LOA or SHN period;
    • CPF Form 90 for December 2019 and January 2020 (only for locals); and
  • Proof of affected workers’ travel to the affected areas:
  • For workers not from the affected countries: Scan of passport photo ID page, and entry and departure stamps from the affected country.
  • For workers from the affected countries: Air tickets and/or boarding passes for travel between Singapore and the affected country (including transit stops).

Employers claiming support for a non-mandatory LOA (such as a company-LOA) must notify MOM that they will be placing workers who meet the eligibility criteria on company-LOA by 26 March 2020, 11:59pm via this link:

https://form.gov.sg/#!/5e75b6ecdc1aec0011461946

B. THS

Employers can apply for the THS after the worker has completed their stay in the temporary housing. Applications will only be open from 01 April 2020 to 30 June 2020.

Employers will have to submit the following documents:

  • Proof of employment for affected worker(s):
    • Itemised pay slip(s) for salary payment for March 2020; and
    • CPF Form 90 for January and February 2020 (only for Singapore Citizens and Permanent Residents).
  • Proof of affected workers’ residential address in Malaysia (for Singapore Citizens and Permanent Residents):
    • Scan of IC, front and back; and
    • Supporting documents indicating residential address in Malaysia.
  • Proof of stay in proper accommodation for affected workers in Singapore:
    • Copy of bill / receipt must show that affected workers were in proper accommodation latest by 25 March 2020, name of workers and address of temporary housing.

C. Enhanced Jobs Support Scheme (“JSS”)

Application is not required. The IRAS will notify eligible employers by post of the JSS pay-out payable to them.Employers eligible for the additional tiers of support will be informed closer to the date of the first pay-out.D. Enhanced Wage Credit Scheme (“WCS”)Employers may submit an online request for the WCS via my Tax Portal from the last week of March till 31 October of the pay-out year (which is the year immediately after the Qualifying Year).

Qualifying employers benefitting from the enhancements to the WCS for wage increases in 2019 will be notified by end June 2020, and will receive a supplementary pay-out thereafter. In view of the supplementary pay-out, employers can consider to submit their requests only after receiving the supplementary pay-out in June 2020. Each request with qualifying employee records exceeding 100 will be subjected to a payment fee.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 04 June 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.