Unpaid Leave MOM Singapore
A guide for employers in Singapore
In the bustling city-state of Singapore, where careers and personal lives often intersect, managing unpaid leave can pose challenges for both employers and employees.
Whether it’s accommodating a team member’s personal needs or dealing with unforeseen circumstances, understanding the nuances of unpaid leave is essential for fostering a harmonious workplace and ensuring compliance with local labour laws.
Let’s dive into the key points HR leaders need to know.
In this guide, we’ll talk about:
- What is Unpaid Leave?
- Key Differences Between Paid Leave and Unpaid Leave
- Is Unpaid Leave Mandatory in Singapore?
- How Many Days of Unpaid Leave Can an Employee Take?
- How To Compute the Salary of an Employee Who Is on No-Pay Leave for the Month?
- How To Calculate the Annual Leave Entitlement for an Employee Who Took Unpaid Leave?
- Can an Employee Take Unpaid Leave During Probation?
- Can an Employee Take Unpaid Leave During the Notice Period?
- Can an Employer Force Unpaid Leave?
What is Unpaid Leave?
Employees may request unpaid leave, also known as no-pay leave, when they have exhausted their paid annual leave or are not eligible for paid annual leave. However, approval for unpaid leave is at the employer’s discretion.
It can be due to various reasons, such as personal emergencies, family matters, or pursuing further education.
Key Differences Between Paid Leave and Unpaid Leave
The main distinction lies in compensation. Paid leave ensures employees continue receiving their regular pay, while unpaid leave means they do not receive compensation during their time off.
Both types contribute to an employee’s overall leave entitlement, and it’s essential for HR policies to strike a balance between the two.
Is Unpaid Leave Mandatory in Singapore?
Unlike some other countries, Singapore doesn’t have specific statutory regulations mandating unpaid leave.
This means that the decision to grant unpaid leave and under what conditions, is generally at the discretion of the employer.
However, it’s important to note that while not legally required, providing unpaid leave can be a valuable benefit for retaining and attracting top talent. Companies often implement policies to address such requests in a fair and consistent manner.
How Many Days of Unpaid Leave Can an Employee Take?
The duration of unpaid leave varies across different organisations. Employers typically set guidelines outlining the maximum and minimum periods that employees can take off without pay.
These policies often consider factors such as the employee’s length of service and the nature of the leave request.
How To Compute the Salary of an Employee Who Is on No-Pay Leave for the Month?
When an employee who took unpaid leave is a monthly-rated full-time employee, he or she will be considered to have performed an incomplete month of work.
According to MOM, the formula to calculate the salary for an incomplete month is:
(Monthly gross rate of pay) x (Total number of days worked in that month) / (Total number of working days in that month)
Read our HR Guide to Effective Leave Management in Singapore to find out more about important guidelines to keep in mind when managing employee leave requests.
How To Calculate the Annual Leave Entitlement for an Employee Who Took Unpaid Leave?
In accordance with MOM, when calculating an employee’s annual leave entitlement, periods of approved unpaid leave should be excluded.
If an employee has taken unpaid leave, the employer may pro-rate their annual leave entitlement based on the number of complete months worked.
Example:
Hannah has worked from January to April and is entitled to a total of 12 days of Annual Leave. She takes 1 day of unpaid leave per month from January to April, at a total of 4 days.
The employer can choose to pro-rate her annual leave by completed months. Since she has taken 4 days unpaid, Hannah is considered to have only completed 3 months.
The number of pro-rated annual leave is:
(3 completed months ÷ 12 months) × 12 days of leave = 3 days
Read our Essential HR Guide to Annual Leave in Singapore 2024 to learn more about employee rights, employer duties, and best practices as you navigate annual leave policies.
Can an Employee Take Unpaid Leave During Probation?
The policy regarding unpaid leave during the probationary period depends on the specific policies of the company.
Some employers may have restrictions in place, while others may consider requests on a case-by-case basis.
It’s advisable for both employees and employers to refer to the employment contract and company policies for clarity.
Can an Employee Take Unpaid Leave During the Notice Period?
Generally, employees can take unpaid leave during their notice period, provided both parties agree. However, it’s essential to have clear documentation in place to avoid any misunderstandings or disputes.
Can an Employer Force Unpaid Leave?
While employers can propose unpaid leave, they cannot force employees into such arrangements. Doing so could have legal implications, as it might be considered unfair labour practice.
Similarly, employers cannot refuse unpaid leave requests without reasonable justification, especially if the request is for a legitimate reason. It’s important to maintain open communication and consider the employee’s perspective.
Crafting a Clear and Effective Unpaid Leave Policy
As an HR professional, you play a vital role in creating a supportive and equitable workplace. A well-structured unpaid leave policy is crucial for maintaining a positive work environment and ensuring fairness for all employees.
Let’s explore the key elements to consider when developing your policy.
Eligibility Criteria
- Personal Reasons: Outline circumstances where employees can take unpaid leave for personal reasons, such as family emergencies, health issues, or personal commitments.
- Educational Pursuits: Specify if employees are eligible for unpaid leave to pursue further education or training.
- Other Situations: Consider any unique circumstances where unpaid leave may be granted, such as volunteering or a sabbatical.
Duration Limits
- Maximum and Minimum: Set limits on how long employees can be on unpaid leave to maintain operational efficiency and fairness.
Specify any restrictions on the consecutive or cumulative number of days of unpaid leave allowed.
Application and Approval Process
- Clear Procedures: Establish a straightforward application process that outlines the necessary steps employees should take to request unpaid leave.
- Notice Period: Specify the required notice period for submitting unpaid leave requests to allow for proper planning and work coverage.
- Documentation: Determine the required documentation to support the leave request, such as medical certificates or proof of enrolment for educational purposes.
- Designated Authority: Clearly define who has the authority to approve or deny unpaid leave requests.
By carefully considering these factors and tailoring your unpaid leave policy to your organisation’s specific needs, you can create a fair, transparent, and employee-friendly policy that supports both your employees’ personal and professional goals.
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