HRSINGAPORE | Timeframe for OT Payment

HRSINGAPORE Community Discussions

Timeframe for OT Payment - Update 2 (Replies)

QUESTION

Dear HR Professionals,

The Employment Act guideline stipulates that company must pay overtime pay to employees after 14 days from last salary period. I would appreciate it if you could share how this is being handled in your company to comply with this guideline.

Giving illustration on cut-off dates and salary payment dates.

Thank you.

REPLY 1

I do not have an answer to this, rather the same question.

Would it be fine to keep salary period from 21st to 20th and make salary payment by 26th/27th of each month? Would like to hear how others are managing.

Abha

REPLY 2

To comply with overtime payment under Part III of the Employment Act, there are 2 usual approaches as illustrated below :

1) 2 payroll runs per month

a) normal payroll for basic salary + fixed monthly allowance based on calendar month (pay on last day of the month or within 7 days after last calendar month).

b) overtime payroll - pay overtime incurred in previous calendar month by 14th of the following month.

2) 1 payroll run per month

a) normal payroll for basic salary + fixed monthly allowance based on calendar month (pay by 28th of the month)

b) overtime salary cycle from 15th of previous month to 14th of current month, payable by 28th of current month.

c) hence (a) is normal salary cycle (calendar month) while (b) is overtime salary cycle (15th to 14th), but you pay both cycles together in one payroll on the 28th.

Option 1 is very clear cut because both normal salary cycle and overtime salary cycle are based on calendar month. This is the usual understanding by most, if not all people.

Option 2 is not easily understood by many people, which requires a fair bit of explanation and interpretation of this clause under Part III of the Employment Act.

REPLY 3

Our company practices this option.

2) 1 payroll run per month

a) normal payroll for basic salary + fixed monthly allowance based on calendar month (pay by 28th of the month)

b) overtime salary cycle from 15th of previous month to 14th of current month, payable by 28th of current month.

c) hence (a) is normal salary cycle (calendar month) while (b) is overtime salary cycle (15th to 14th), but you pay both cycles together in one payroll on the 28th.

Adeline

REPLY 4

We cut off at 15th. Pay last 16th till this 15th. No staff complain on such practice for 30 years, all happy. As long as you pay promptly and their basic pay is paid 1-31 monthly, I think most can understand that we need time to calculate OT and won’t cheap on them. Employment Act’s purpose is to deter errant employers drag the workers’ salaries “unreasonably”.

Dksw

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