Singapore Retail Workers To Get Pay Increases Under Progressive Wage Model From September 2022

Retail workers in Singapore are set to receive wage increases by 8.4 to 8.5 per cent annually over the next three years under the Progressive Wage Model (PWM) for the retail sector. The wage increase is one of the recommendations announced by the Tripartite Cluster for Retail (TCR) Industry on Aug 15 under the Progressive Wage Model (PWM). These will take effect from Sep 1 2022 to Aug 31 2025, and shall apply to those working in jobs defined by the TCR, such as retail assistants, cashiers and assistant retail supervisors.

Other key recommendations include minimum training requirements for all retail job roles under the model and a clear career progression pathway. There are about 46,000 full-time and part-time employees in retail, out of which an expected 19,000 lower-wage workers will benefit from the PWM.

What Is The Progressive Wage Model?

The PWM has already been implemented in cleaning, security and landscape to help increase workers' wages through upgrading skills and improving productivity. Developed by tripartite committees consisting of unions, employers and the government, the PWM helps to uplift lower-wage workers' wages. The PWM covers Singapore citizens and permanent residents in the Sectoral PWs for cleaning, security and landscape.

Since being implemented, PWM sectors have raised wages at a sustainable and meaningful pace without hurting the livelihoods of the lower-wage workers. The Singapore Government accepted all 18 recommendations by the Tripartite Workgroup on Lower-Wage Workers on 30 Aug 2021, and consecutively, PWM has expanded to include Retail, Food Services and Waste Management.

Retail Progressive Wage Model

Retail assistants, for instance, will have to be paid at least S$1,850 a month, excluding overtime, from Sep 1. The TCR arrived at this figure after consulting extensively and considering the existing median wage of these jobs. Retail assistants will also get a minimum pay increment of S$125 from Sep 1 next year; and another increase of S$200 from Sep 2024. This is a total increase of more than 17 per cent, which works out to a compounded annual growth rate of 8.4 per cent. Additionally, separate gross wage requirements will apply for overtime work.

The decision to set wage levels for all progressive wages in gross terms, in the long run rather than basic wages, would give workers greater certainty of the expected monthly wage for a set of standard working hours. Furthermore, it would provide firms with more flexibility to structure the workers’ wages based on their specific needs, said the tripartite cluster. That way, firms can include other variable components such as allowances, commissions and regular cash payments to meet the required retail PWM monthly gross wage. Similarly, the 3-month averaging arrangement was introduced for the retail PWM to account for seasonal fluctuations in the industry. This gives employers flexibility in meeting the PWM requirements while ensuring fair wages for retail workers.

Employers will also be given a 6-month “run-in period”, where no enforcement action will be taken against those to fail to comply with the new wage requirements. It will provide employers with sufficient time to adjust to the new moves. Aside from the wage increases, the tripartite cluster has also mapped out five clear job roles under the PWM to provide a progression pathway for workers in the industry. Starting with the entry level of a retail assistant or cashier, followed by the senior retail assistant or senior cashier, assistant retail supervisor; retail supervisor; and the retail manager. These will be reviewed periodically to account for changes in the retail industry due to business and workforce transformation.

The tripartite cluster has also recommended that the industry set minimum training requirements to ensure that retail workers continuously upgrade their skills. Workers under the 5 PWM job roles will be required to take one Workforce Skills Qualification training module to meet the minimum requirements.

Speaking at an event, National Trades Union Congress (NTUC) Secretary-General Ng Chee Meng said: “The NTUC will continue to listen out for the needs of our workers, and through our #EveryWorkerMatters conversations, we want to get a better sense of the different moods and not just angle for the next three years, but for win-win possibilities between our employers and workers in the longer-term,” he said.

Progressive Wage Credit Scheme

The government will co-fund the salary increases under the Progressive Wage Credit Scheme. To help retailers cope with the rise in costs, the government will co-fund 75 per cent of the salary increase for workers with gross monthly wages of up to $2,500 in 2022 and 45 per cent for workers with gross monthly wages of $2,500 to $3,000.