Singapore’s employment landscape is supported by the Progressive Wage Model (PWM), a framework designed to uplift lower-wage workers. Unlike a general minimum wage, the PWM mandates a sustained wage increment tied to upskilling and increased productivity across specific sectors.
For businesses, understanding and adhering to this model is essential for compliance and talent stability. This guide provides clarity on what the Progressive Wage Model (PWM) is and how employers can navigate its requirements.
What is the Progressive Wage Model?
The Progressive Wage Model (PWM) is a tripartite initiative involving the government, employers, and unions. It ensures that workers receive guaranteed wage increments as they progress in their careers and upgrade their skills. It incorporates three components:
- Wage: Stipulating minimum salary levels across different job roles and skills ladders. This ensures that workers earn higher salaries as their skills develop.
- Training: Requiring workers to undergo specific training and certification to meet skill targets.
- Career progression: Providing a clear pathway for workers to advance into higher-skilled, higher-paying jobs within their sector.
Which Sectors and Occupations are Covered?
The PWM is sector-specific, ensuring relevance and practicality across industries employing lower-wage workers. Unlike general legislation, the PWM mandates compliance within specific fields.
The model currently covers a growing list of sectors and occupations, including:
- Service industries: Cleaning, Security, Landscape, Lift & Escalator Maintenance.
- Wider industries: Retail, Food Services, and Waste Management.
- Occupational expansion: The model continues to expand to cover specific roles, such as Administrative & Corporate roles across all sectors.
This continuous expansion means employers across industries must stay ahead of upcoming changes and ensure their salary structures align with the latest requirements for all covered employees.
Key Updates and Compliance Requirements
To remain compliant, employers must adhere to the PWM salary requirements, which demand a structured approach based on three components:
- Tiered wage structure: You must ensure that employee salaries correspond to the specific wage tiers mandated for their job role and skill grade. These salary requirements are periodically reviewed and updated by the tripartite partners (MOM, NTUC, and SNEF).
- Mandatory training: Compliance is intrinsically linked to training. Employers must ensure that workers complete the necessary Workforce Skills Qualifications (WSQ) training modules relevant to their job level. Maintaining strict records of these certifications is non-negotiable.
- Structured progression: Businesses must clearly map career progression pathways that align with required skill upgrades.
Failing to meet any of these requirements, whether it’s underpaying the mandated PWM salary or lacking proper training documentation, can result in penalties and impact your ability to hire foreign workers. Strict, digital record-keeping is thus mandatory for accurate reporting and risk mitigation.
Streamline PWM Compliance With BIPO HRMS
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Most HRMS platforms don’t automatically flag PWM salary amounts as compliant or non-compliant by sector, as these are managed internally by the employer. However, they’re a helpful tool for managing the complex administrative and documentation requirements of the model. Here’s how BIPO helps you maintain due diligence:
- Documentation of roles: The system allows you to define Main Job Duties and the required PWM Job Level for each employee, which are necessary to generate the Occupation Employment Dataset (OED) report for the Ministry of Manpower (MOM).
- Training and certification tracking: Use the Employee Details section to maintain accurate records of training and certifications, which are essential components of the PWM. The system can also set up reminders for certification expiry.
- Salary validation prompts: By setting up Salary Grades within the system, the HRMS system can prompt your HR team when adding a new salary record that falls outside the defined minimum and maximum salary range for a specific job level.
- Accurate payroll calculations: BIPO’s payroll software supports complex calculations, including hourly-rated computations and accurate salary proration when a wage adjustment is implemented mid-month.
The Strategic Value of Compliance
Implementing the PWM correctly is more than just avoiding penalties. Businesses that commit to the model benefit from a more engaged and motivated workforce, which translates directly into higher productivity and better service quality. This commitment enhances your brand reputation, making you a more attractive employer in Singapore’s competitive market.
Partner Up With BIPO for Better Compliance
Navigating the complexities of the PWM requires a robust HR system in Singapore that businesses can rely on. BIPO is your trusted partner for payroll and compliance management. Our comprehensive HRMS provides the documentation, validation, and payroll support necessary to manage the PWM confidently and efficiently.
Talk to our experts to learn how BIPO’s solutions can streamline your PWM compliance.
