12,000 lower-wage food-service workers to earn at least S$1,750 from Mar 1 (2024)

Elysia Tan

Published Wed, Feb 15, 2023 · 2:33 pm

ABOUT 12,000 lower-wage workers in Singapore’s food-services industry will, from next month, get a pay jump to at least S$1,750 – which has been set as the entry-level wage for the industry.

Including further pay rises in March 2024 and 2025, these resident workers, which include food-stall assistants and waiters, will earn up to 19 per cent more in their baseline salary.

The increments come under the Progressive Wage Model (PWM) developed for the industry by a committee of representatives from the unions, employers and government. This PWM, the latest in a suite of progressive wage moves, also sets out minimum training requirements and progression pathways for food-services workers at various skill levels.

The government accepted the committee’s recommendations on Wednesday (Feb 15).

The Ministry of Manpower (MOM) said: “Employers with food-services workers must comply with food-services PWM requirements in order to apply for new work passes or renew existing work passes.”

From Mar 1, 2023, “quick-service” workers – those in establishments such as food courts, coffee shops, fast-food outlets, food kiosks, self-serve eating houses – as well as workers in some supermarkets with ready-to-eat stations, will get their minimum gross wage raised to S$1,750.

Workers in “full-service” outlets – food establishments with wait staff – as well as caterers and central kitchens, will earn at least S$1,850 monthly.

The baseline gross wages for both groups will then be increased by a fixed quantum of S$165 annually from Mar 1, 2024, and again from March 2025.

These increases will be co-supported under the previously-introduced Progressive Wage Credit Scheme, which was enhanced in 2023’s Budget.

The new PWM will apply to full-time and part-time resident employees in the industry and employed by firms that hire foreign workers on work passes. In total, 41,000 food services workers are expected to benefit eventually, 17,000 of which will be full-time lower-wage workers.

A six-month transition period will be introduced to give employers time to adjust and comply with the new wage requirements. After the adjustment period, employers who do not comply may have their work-pass privileges suspended, said MOM.

Alongside the wage increases, employees in food establishments covered by the PWM must attain at least two Workforce Skills Qualifications (WSQ) training modules, based on their job roles.

Workers involved in the direct handling and preparation of food and beverages in Singapore Food Agency-licensed establishments continue to be mandated to complete the Food Safety Course Level 1, which can be considered as one module under the new training stipulations.

Employers will have up to end-February 2024 to meet the training requirements.

The PWM also proposes a career ladder, with job roles included covered by mandatory PWM wage requirements, excepting those in the highest rung, where market forces will be left to decide wages.

Rasel Catering, along with likely many other catering companies, was already paying more than the minimum wage set by the PWM “way before” Covid, said its managing director Alan Tan. Further pay increases were given during the pandemic years in order to keep workers amid a labour shortage, he noted.

He added that he welcomed the inclusive moves and skill-upgrading efforts, and suggested that businesses focus on improving service-related skills, in addition to increasing technology adoption.

Likewise, Priscilla Lim, human resource manager at Mexican-Turkish food kiosk chain Stuff’d, said that employees are already being paid above the PWM’s minimums. The company also offers its staff annual salary increases, which will continue to keep their wages above the minimum levels.

However, the employers who will need to raise wages to comply with the PWM will find themselves having to absorb most of the cost increases, said Andrew Tjioe, a representative of the Singapore National Employers Federation and co-chair of the food-services industry tripartite group. This is because the industry is highly competitive, and only “a small portion” of costs can be passed on to consumers, he noted.

But Jason Thian, director of chicken rice chain Boon Tong Kee, said that most of the company’s Singaporean staff are in senior management, and so fall outside the ambit of the PWM. But whatever cost increases from higher salaries for its lower-wage workers would have to be passed on to consumers.

With the possible exception of high-end restaurants that sell “high-value food items”, food-and-beverage businesses are unable to absorb further increases in wage costs, with other costs rising due to inflation, Covid-19 and the Russia-Ukraine war, he pointed out.

While he is concerned about remaining competitive, he said that the business must prioritise “what makes business sense” rather than compare its prices against others’. Furthermore, he believes that competitors will similarly be forced to raise their prices.

Senior Minister of State for Manpower Zaqy Mohamad told reporters at an event: “I think most Singaporeans don’t mind paying a bit more, if (they) know that it supports our lower-wage workers and keeps them in the job.”