How the Singapore Budget 2023 will impact HR Policies and Organizations?
On 14th February 2023, the Singapore Budget 2023 was unveiled, containing crucial details affecting HR policies and organizations. We have condensed the key information.
Discover the enhanced tripartite guidelines effective from February 2023. Also, explore strategies for SMEs to address workplace harassment and tips for a successful approach to flexible work.
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Key Information on Budget 2023
The Singapore Budget 2023 was announced on 14th February by the Deputy Prime Minister and Minister for Finance. Here’s a summary of how it impacts HR policies and organizations.
Paternity leave and childcare leave to double from 2024.
- From 1 January 2024, Government-paid paternity leave will be doubled from two weeks to four weeks. The additional two weeks will be on a voluntary basis.
- An increase in the unpaid infant care leave from six to 12 days per year for each parent with children under 2 years old.
Uplifting Employment Credit introduced.
- Uplifting Employment Credit will be introduced in the form of a time-limited wage offset, in a move to encourage firms to employ ex-offenders and persons with disabilities.
- Senior workers who wish to continue working will also be supported via the extension of the Senior Employment Credit and Part-time Re-employment
Aligning CPF contribution rates of platform workers and companies
- The CPF contribution rates of platform workers and companies will be aligned with those of employees and employers over a period of five years. As take-home pays will be affected, CPF Transition Support will be provided in the first four years after implementation.
- CPF contribution rates of senior workers will be increased and their minimum CPF monthly payout will be boosted under the Retirement Sum Scheme, to S$350 a month.
- CPF monthly salary ceiling will be raised from S$6,000 to S$8,000 in 2026. The increases will be phased in over 4 years, starting from this year, to allow employers and employees to adjust to the changes
Jobs-Skills Integrators to aid training and positive employment outcome.
Job-Skills Integrators will engage enterprises to understand the manpower and skills gaps in the sector.
- Work with training providers to update existing training programmes, or develop new ones, and
- Work with employment facilitation agencies, industry partners and unions to ensure that training translates into better employment and earnings prospects.
Enhanced tax deductions/allowances provided to businesses with a cash conversion option from YA2024 to YA2028:
- Annual tax deductions/allowances of 400%, each capped at S$400,000 of qualifying expenditure for:
- Local research and development activities,
- Registration and Intellectual Property,
- Acquisition and licensing of qualifying IP Rights, for taxpayers with a revenue less than S$500mn, and
- Qualifying courses that are aligned with the Skills Frameworks
- Annual tax deductions of 400%, capped at S$50,000 of qualifying expenditure, for Innovation projects carried out with polytechnics, ITE, or other qualified partners.
S$4bn top-up to the Government National Productivity Fund
The scope of the fund will be expanded to include investment promotion as a supportable activity. This includes:
- Supporting companies to build new capabilities.
- Adding greater value to our domestic ecosystems
- Upskilling our workers
Enhancements to the Enterprise Financing Scheme
Current enhancements to the Enterprise Financing Scheme will be extended for a year till 31 March 2024 to facilitate access to credit. The Energy Efficiency Grant will also be extended for a year to continue supporting businesses in the food services, food manufacturing, and retail sectors to invest in energy efficiency.
Outlook for 2023
For 2023, the key factor that will shape the country’s growth is the global economy. The Government expects positive but slower economic growth of 0.5% to 2.5% this year.
“But there are major uncertainties and downside risks to this year’s forecast. We must prepare ourselves for these risks and be ready to respond to them.”
Source: Budget | Budget Statement (mof.gov.sg)
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Enhanced Tripartite Guidelines from Mid-February
Workers supporting causes outside the workplace should not face any kind of bullying, harassment or ostracism at the workplace.
Additional guidelines rolled-out will take effect in mid-February. Its calls for employers to be sensitive to the diverse cultures, values and beliefs of their employees when developing, promoting or implementing events, programmes and policies that are not related to work.
Grievance-Handling
It is important for employers to ensure a safe environment where employees can freely express their concerns, utilizing an appropriate grievance-handling process.
Source: Enhanced Tripartite Guidelines on Exercising Sensitivity for a Harmonious Workplace (mom.gov.sg)
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What SMEs can do to tackle workplace harassment
Creating a workplace where employees feel safe and respected is one of the first steps to attract and retain talent. This is especially important for small business owners who may often face stiff competition from bigger and reputable companies when recruiting and retaining their best talent.
3 Tips for SMEs
1. Be conscious of behaviors that may lead to a toxic work environment
2. Establish clear expectations and hold all employees accountable
3. Designate alternate person(s) to take charge of harassment issues
Source: What SMEs can do to tackle workplace harassment (humanresourcesonline.net)
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How to create a successful approach to flexible work?
In 2023, organizations will redefine remote and hybrid work strategies as employees seek greater work-life flexibility. A people-centric approach, backed by technology, is vital for successful flexible work. Clear policies, effective communication, and eliminating bias foster optimal productivity and employee satisfaction.
Source: Creating a successful approach to flexible work | HRM Asia (hrmasia.com)
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