10 Key Intern and Trainees Employment Rights Singapore

Bringing onboard interns and trainees is an excellent exchange between the hirer and hired. Interns and trainees get valuable access to first-hand experience in their chosen industry. They can build networks, which can be invaluable in landing good full-time roles. Employers also are able to get closer access to talent, since internships provide employers with an ability to really suss out their competencies.

It’s important to know that just like regular full-time employees, interns and trainees have employment rights too. Business owners should familiarise themselves with these rights, so that they don’t fall astray of labour regulations in Singapore.

Contents:

1. Employment Rights of Interns in Singapore
   1. Compensation for work-related injuries/sickness
   2. Basic pay
   3. Overtime pay
   4. Intern pay deadlines
   5. CPF
   6. Annual leave
   7. Sick leave
   8. Rest days
   9. Work hours and breaks
   10. Deductions
2. Employment Rights of Trainees in Singapore

Employment rights for interns in Singapore

If you employ an intern under a contract of service, the intern is an official employee of your company, and the intern will be covered by the Employment Act and the rights that it provides. If you have an employment contract with your interns, chances are that they are working for you under a contact of service.

Contracts of service are different from contracts for service. Contracts for service apply to independent contractors or freelancers. Freelancers are not covered by the Employment Act. Students doing internships as part of graduation/curriculum requirements are also not covered under the Employment Act. Do note that this only refers to internships required by the school curriculum. If the student performs an internship that is not required by the school, e.g. summer internship to gain experience, earn pocket money, etc., then they will be covered by the Employment Act.

It is more common for internships to be structured as contracts of service, since interns are not often taken in as freelancers. Therefore, this guide will be written for interns employed under a contract of service.

Here’s a table summarising the list of intern employment rights. We’ll go through each of these rights in this guide.

#1. Interns must be compensated for work-related injury/sickness, including Covid-19

Under the Work Injury Compensation Act (WICA), employers are liable to pay for their interns’ work-related injuries/sicknesses, including Covid-19.

Employers must pay for the following costs:

• Medical expenses, up to $45,000 per intern
• Lost salary while on MC (up to 1 year for hospitalisation leave, and up to 1 year for outpatient leave)
• Temporary/permanent disability compensation, up to $289,000 per intern
• Death compensation, up to $225,000 per intern

WICA regulations set out a comprehensive set of expenses that employers are liable for, if their interns get injured or sick due to work. The $45,000 cap for medical expenses is high. The compensation for lost wages is also high – interns who get injured or diseased from work can claim up to 1 years’ worth of salary from you. If interns sue under Common Law, employers can face unlimited civil liability for work-related injuries/sicknesses.

If you’re hiring interns, it’s important to consider covering them with Work Injury Compensation Insurance, which will cover all these costs for you.

Example: Mark is an intern with an architectural firm. Mark goes to a site visit to check on the progress of a new house being built. While at the work site, a concrete block falls and strikes Mark on the head. Mark suffers a severe head injury. He has to undergo extensive surgery to clear a blood clot in his head. The blood clot unfortunately caused Mark to lose vision in one eye. He also falls into a coma for 2 months. His medical bills are $90,000. While he was an intern, his monthly pay was $1,000.

Medical expenses: Mark’s employer will have to pay the maximum of $45,000 for his medical expenses.

Lost salary: The employer will have to pay $2,000 ($1,000 times 2 months) for the 2 months that Mark was hospitalised due to the work-related incident.

Permanent disability: The loss of one eye is a permanent disability. Mark’s employer will have to pay $144,500 as permanent disability compensation.

Total cost to employer: $191,500

#2. Basic pay

Do employers have to pay interns?

No. The law does not require employers to pay their interns. It is perfectly legal to take in unpaid interns. If you choose to pay interns, there is no minimum wage that you must pay them.

Of course, just because something is legal doesn’t mean it’s always the best thing to do for business. Internships are a great way to recruit new talent into your company. Unless your company has a super strong and visible brand (e.g. Goldman Sachs, Grab, etc.), offering an unpaid internship is probably going to turn most potential applicants off. You’re probably not going to get top-tier talent without paying a salary. You should compensate your interns with at least enough money for necessities (e.g. travel, food, etc.). Otherwise, they might not have a very favourable view of you as an employer. This might reduce your pipeline of talent once the interns graduate and are available for full-time employment. Also, if your employment contract with the intern has stipulated a salary, you can’t just cut their pay off when you feel like it. You have to honour the terms of your employment contract.

The only exception to minimum pay on interns this concerns government grants. There are national grants available to reduce the costs of intern compensation. For instance, under the SGUnited Traineeship Scheme, employers must pay a minimum of:

• $1,800/month for university graduates
• $1,100/month for ITE graduates

Under the Global Ready Talent Programme, employers can receive subsidies of up to 70% of their interns’ pay. However, employers must offer interns a minimum pay (before subsidies) of:

• $800/month to ITE and polytechnic students,
• $1,000/month to university students

#3. Overtime pay

Interns who earn $2,600/month or less are protected by Part IV of the Employment Act, and therefore must be paid overtime if they work more than their regular hours.

Employers must pay overtime for work in excess of 44 hours in a week. Overtime refers to each hour of work done that exceeds the hours stated in their employment contract. For every hour of overtime, MOM requires employers to pay 1.5x the intern’s basic salary.

Businesses cannot make interns or employees work more than 72 hours of overtime per month.

#4. Intern pay deadlines

How often do employers have to pay their interns?

Employer must pay their interns at least once per month. They are free to pay them more often than that (e.g. once a week). However, employers are not free to delay payments over a longer duration (e.g. once a quarter).

Deadlines for salary:

Employers must pay their interns within 7 days of the last day of the payable month.

Example: Sally starts work on 1^st January. Her allowance period is from the first to last day of each month. Sally’s employer must pay her for the work she did in January, by 7^th February.

Deadlines for overtime pay:

Overtime compensation must be paid within 14 days after the last day of the payable month.

Example: Jim starts work on 1^st January. His allowance period is from the first to last day of each month. He does overtime work. Jim’s employer must pay his basic allowance for the work he did in January, by 7^th February. The employer must also pay his overtime compensation by 14^th February.

Pro-rated pay:

You can pro-rate your intern’s pay if they miss some days of work. This is the same process as with regular full-time employees. Common reasons for pro-rating pay include:

• Intern taking unpaid leave
• Intern ends employment before the end of the month
• Intern starts work after the first day of the month;

Use this formula to calculate pro-rated pay:

(Number of days worked/Number of days the intern is supposed to work) * Monthly gross pay

Note: Gross pay is basic pay + allowances (e.g. transport/food allowance) + overtime pay. It doesn’t include CPF.

Example: Sammy is an intern at your company. His monthly gross pay is $600. Sammy’s contract requires him to works 20 days a month, but he only works for 10 days. Sammy’s pro-rated pay is therefore $300.

Paying interns when they leave the company:

There are deadlines for paying your interns their salary when they leave your company. There are two deadlines, depending on whether your intern have given you proper notice in accordance with their employment contract, or not.

Intern provided you with proper notice, as stated in their employment contract: Pay the salary owed to them on the day itself. You cannot delay this payment till the next day.

Intern did not provide you with proper notice, as stated in their employment contract: Pay the salary by the 7^th day after their employment ends.

Required notice periods for interns:

Your employment contract should state the notice period. If you didn’t specify a notice period, then apply the minimum notice periods below:

These minimum notice periods are provided for under Part II, Paragraph 10 of the Employment Act.

Notice periods apply to both employers and interns. A 1-day notice period means your intern can up and leave by giving you 1-day’s notice. It also means that you can terminate your intern’s employment by informing them 1 day in advance.

#5. CPF contributions

The majority of interns will qualify for CPF contributions. The only exceptions are:

• JC students interning during school holidays
• Polytechnic, ITE and university students performing internships required to graduate (whether during the school term or school holidays)
• Foreign university students who take internships in Singapore

Apart from the individuals in the categories above, you will have to make CPF contributions for all interns who receive a salary or allowance. The employer CPF contribution rate for employees under 55 years old is 17%. This means if you pay your interns $1,000/month in salary, you have to contribute an additional $170/month for their CPF. That’s a total of $1,170/month.

#6. Paid leave

Are interns entitled to take leave?

Yes. If your interns have worked for your company for at least 3 months, they are entitled to take i) pro-rated paid annual leave, and ii) paid sick leave. Take note that such paid leave is a legal entitlement. Employers must grant this leave to their interns. It’s not a benefit that employers can retract as and when you wish.

Pro-rated paid annual leave

Interns are entitled to take paid annual leave, just like your regular full-time employees. Since many internships are less than a year (most are 3-6 months long), employers will likely be pro-rating the annual leave entitlements of interns. The amount of leave is pro-rated to the number of months that the interns will work.

MOM has stipulated that all employees in their 1^st year of service are entitled to a minimum of 7 days of paid annual leave. You can give more than this, but you can’t give less. The vast majority of internships are under a year, so in most cases you’ll be using this 7-day figure to do your pro-rating of leave.

Helpful tips for calculating pro-rated annual leave for interns:

1. Round to the closest whole number when pro-rating annual leave.
2. When calculating the number of days of work, don’t include days where interns work less than half a day. Only count days where they work more than half a day.

Example: Tim is an intern at your company. Tim will intern for 4 months. Tim’s pro-rated annual leave is 4 months (Tim’s internship duration) divided by 12 months (length of a year), times 7 days (minimum leave entitlement). That gives us 2.33 days. Round this to the closest whole number, which is 2.

Therefore, you must provide Tim with at least 2 days of annual leave.

Going AWOL, and its impact on leave

If an intern goes absent without official leave (AWOL) for more than 20% of their working days, they will not be entitled to claim any annual leave at all.

#7. Sick leave

Similar to full-time employees, interns are entitled to take sick leave. You must provide for a minimum number of sick leave days, depending on how long the intern will work for your company. The table below summarises this:

You are free to provide your interns with more sick leave than the amounts stated above. However, you cannot provide less than these minimums amounts.

Employment contracts with interns

You should provide employment contracts to your interns. In your employment contracts, you must list out the Key Employment Terms (KETs). This is a similar requirement to taking on full-time employees.

Here are the KETs you should state in the employment contracts with interns:

• Intern full name
• Company full name
• Intern job title
• State intern’s main work duties/responsibilities
• Employment start date
• Employment duration
• Work schedule: daily working hours, number of working hours per week, and non-working or rest days
• Salary amount
• Salary payment period (e.g. 1x a month)
• Allowances
• Bonuses, commissions, and other additional incentives
• Overtime pay rate (e.g. $5 per hour)
• Overtime payment period (e.g. 1x a month)
• Company benefits (if applicable): medical insurance, recreational benefits, dental benefits, etc.
• Amount of leave: annual leave, sick leave, maternity/paternity leave
• Probation period (if applicable)
• Notice period
• Place of work (optional, but recommended to include this if the employee will work from an address different from the company’s registered address, e.g. WFH arrangement)

Having a clearly-drafted set of KETs will minimise the possibility of employer-employee disputes later on.

#8. Rest days

The Employment Act requires businesses to provide office-based workers earning $2,600/month or less with rest days. Most interns will have a salary under this threshold. This means employers will have to provide such interns with at least one rest day, per week.

The employer can determine the rest day – for instance, a Saturday. When employers decide on the rest day, they also need to share a rest day roster with the employees in advance (at least before the start of each month), so that interns are aware of the days they don’t need to work. A rest day is 24 hours long.

If employers want to have their intern work on a rest day, that is permissible. However, employers must pay their interns extra salary for such work.

#9. Work hours and breaks

In keeping with the spirit of protecting lower-wage workers, Singapore law stipulates maximum consecutive work hours and mandated breaks for these employees.

Employers must provide a 45-minute meal break for every 8 hours of work.

Maximum work hours

Employers cannot make interns who $2,600/month or less work more than 12 hours a day. This is legislated under Paragraph 38 of the Employment Act.

An intern may be required to exceed these limits only if there are exceptional situations such as:

• Intern’s work involves defending Singapore’s security
• Intern’s work involves urgent repairs to machinery and equipment
• Intern is part of an industry integral to Singapore’s industrial economy
• Intern is required to assist with an accident at work
• Intern is required to assist with a threat to the business

Employers must provide a 45-minute meal break for every 8 hours of continuous work the intern performs.

#10. Deductions

Business owners can make deductions from intern salaries in some situations. Here are some common situations where such claw-backs are permissible:

1. Intern damages business property: Deduction amount has to be the same value of the damage caused. Maximum deduction is 25% of one month’s salary.
2. Intern is absent without official leave (AWOL): Deduction amount has to be the same value of the wages payable for days AWOL. Maximum deduction is 25% of one month’s salary.
3. Intern receives accommodation, amenities, or other services: Deduction amount has to be the same value of accommodation, amenities, or other services provided. Maximum deduction is 25% of one month’s salary. For deductions in point (3) only, employers must seek consent from the employee.

If an employee is liable for multiple deductions, the total deductions employers can make is 25% for all deductions combined. This protects employees from potentially having their entire salary deducted.

Consequences of breaching interns’ employment rights

MOM takes a serious view of employers who don’t comply with their obligations to workers. If you breach the various employment rights described here, you can be convicted of a criminal offence. Under Section 112 of the Employment Act, significant penalties apply.

First offence:

You can be jailed up to 6 months, and/or fined up to $5,000.

Second offence onwards:

You can be jailed up to 12 months, and/or fined up to $10,000.

Employment Rights of Trainees in Singapore

Generally, trainees do not sign employment contracts, and are therefore not considered employees. Non-employees do not benefit from the employment rights described above. Most terms of employment, like types of leave, leave days, benefits, etc. will be mutually agreed between the trainee and the employer. Non-employees do not receive CPF contributions.

Trainees who sign an employment contract (specifically, a contract of service), are likely to be considered employees and therefore have the above employment rights.

SGUnited Trainees

Workforce Singapore has issued statements that SGUnited trainees are not considered employees, and are not covered by the Employment Act. This has a range of important implications for employers.

This applies to both the i) SGUnited Traineeship, and ii) SGUnited Mid-Career Trainees.

Here are some key employment facts for employers who hire SGUnited trainees:

Employers are encouraged to treat trainees fairly. From a business perspective, this makes perfect sense. If businesses treat trainees unfairly, it’s likely to retain the trainees after the traineeship period ends. In this age of accountability that’s fueled by social media, businesses who mistreat their trainees can expect to receive very bad online PR that will likely affect their sales, and general ability to do business.

Employers should offer trainees similar terms as their interns, such as by providing:

• Adequate salaries/allowances,
• Overtime pay
• Reasonable work hours
• Annual paid leave
• Sick leave

Mandatory insurance for SGUnited Trainees

If you wish to hire an SGUnited trainee, you must purchase Work Injury Compensation Insurance for them. This is a requirement set out by SGUnited.

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