Employers urged to give lower-wage workers 6%-8% pay rise under NWC’s 2027 guidelines

[SINGAPORE] Employers should give lower-wage workers earning up to S$2,800 a month pay rises of 6 to 8 per cent, with the size of the increase depending on their business performance and prospects, the National Wages Council (NWC) said on Monday (Oct 19).

Firms that have performed well and have positive prospects should give pay rises at the higher end of the range, or at least S$135 to S$170, whichever is higher, the council recommended.

Meanwhile, employers that have done well but face uncertain business prospects should give built-in pay rises around the middle of the 6 to 8 per cent range, or at least S$135 to S$170, whichever is higher.

Employers that have not performed well but remain profitable should give built-in pay rises at the lower end of the range, or at least S$120, whichever is higher.

Finally, a fourth category was introduced this year for firms that have performed poorly and are unprofitable. These businesses can give their lower-wage workers a pay increase of at least S$120. Firms are classified as unprofitable if their total expenses exceed their total income.

The NWC’s recommendations take into account the uneven growth across sectors, with some benefiting from strong artificial intelligence-related demand, while others have contracted.

“In view of the uneven growth across lower-wage worker hiring sectors and firms, the NWC also recognises the need for greater flexibility,” said NWC chairman Hsieh Fu Hua.

The government has accepted the guidelines, the Ministry of Manpower (MOM) said in a separate statement.

The new category is an “important change” to the guidelines, said Kuah Boon Wee, president of the Singapore National Employers Federation (SNEF).

“Even as we continue to push to uplift wages and support lower-wage workers, we need to provide greater flexibility,” he said at a press briefing on the new guidelines.

National Trades Union Congress (NTUC) president K Thanaletchimi noted that this year’s recommended range is the highest since quantitative guidelines for lower-wage workers were introduced in 2021.

“Positive-leaning” approach

The NWC’s guidelines, which cover the period from Dec 1, 2026, to Nov 30, 2027, adopt a “positive-leaning” approach to pay increases.

The council urged employers to lean towards giving pay rises, given the economy’s stronger-than-expected performance this year, while recognising that uncertainty remains.

The recommended range is higher than last year’s 5.5 to 7.5 per cent, as are the minimum-dollar amounts, reflecting greater scope for firms that have done well to share their gains.

Firms that have done particularly well are encouraged to go beyond the guidelines.

Melissa Ng, executive secretary of the Food, Drinks and Allied Workers Union, said F&B businesses face cost pressures, yet workers across roles have contributed to the sector’s resilience.

“We welcome the stronger wage recommendations for lower-wage workers, which will provide an important uplift for many workers in the sector,” she said.

MOM permanent secretary Stanley Loh said sectors such as electronics and precision engineering, which have benefited from strong global AI-related demand, should share their gains with workers.

Consumer-facing sectors such as F&B services must press on with transformation to raise wages sustainably, he added.

Fourth category

On the new category, Loh said the council wanted to urge sectors that have done well to give more support to lower-wage workers, while recognising that some firms are struggling.

“We’re trying to strike a fine balance here, and also reflect the ground reality,” he said.

Just over a quarter of employers adopted last year’s guidelines, though more than 60 per cent still gave pay rises that fell short of them, Loh noted.

Kuah said many employers had told SNEF it was difficult to meet last year’s recommended range. A S$120 floor thus gives them an achievable target, and is still a meaningful increase for the lowest-paid, he said.

“Our message to them is, please do your part, because it is important that all of us commit to the process of making sure that lower-wage workers are not left behind,” he said.

Loh stressed the guidelines are not a mandatory minimum wage. To guard against firms wrongly claiming to be unprofitable, the ministry checks employers’ declarations through its surveys, he said.

Profitability was chosen as the dividing line because it can be verified, unlike the more ambiguous description of firms who have “done well”, he added.

SNEF will also work with employers to ensure they do not use the flexibility to unfairly reward their workers less fairly by claiming that they are unprofitable when they are not, said Kueh.

Business reaction

The Singaporean-German Chamber of Industry and Commerce welcomed the guidelines as balanced, saying they recognise both Singapore’s strong economic performance and continued uncertainty for businesses.

Its executive director Tim Philippi said business sentiment at the company level remains more varied than headline growth suggests, and access to local skilled staff is a particular challenge.

The chamber also urged continued monitoring of the cumulative impact of employment-related costs on Singapore’s competitiveness.