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Companies not obliged to offer annual leave, sick leave, OT pay or CPF contributions for SGUnited traineeships

Host organisations can give trainees transport or meals allowances on a reimbursement basis but the authorities make it clear that these allowances are not covered under the 80% funding and would be at the host organisations’ cost.

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A post highlighting how host organisations are not obliged to offer annual leave, sick leave, overtime pay or Central Provident Fund (CPF) contributions for SGUnited traineeships is trending online.

An FAQ document about the SGUnited Traineeships on the Workforce Singapore website states that discretionary goodwill benefits for trainees can only be non-monetary. The authorities explained: “As trainees are not employees, they will not be entitled to bonuses or eligible for overtime/shift pay.”

Host organisations can give trainees transport or meals allowances on a reimbursement basis but the authorities make it clear that these allowances are not covered under the 80% funding and would be at the host organisations’ cost.

Further, host organisations will not be eligible for government funding if they wish to pay CPF to trainees since they do not need to pay CPF under the traineeship programme. Neither can host organisations claim Jobs Support Scheme (JSS) payments since trainees are not employees. The FAQ document states:

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“As this is a traineeship programme, and there is no employment relationship between the trainees and host organisations, host organisations do not pay CPF. If there is intention to contribute CPF and establish an employment relationship, then such arrangements will not be eligible for funding under the SGUnited Traineeship programme.

“As trainees are not considered employees, host organisations will not receive JSS payouts for these trainees.”

Trainees are also not entitled to annual leave or sick leave entitlements under the government scheme. The authorities said, “As this is a traineeship where there is no employer-employee relationship, host organisations are not obliged to offer employee benefits to trainees. Host organisations may choose to offer non-monetary benefits on a discretionary goodwill basis.”

Host organisations may exercise the right to deduct the trainee’s training allowance proportionately if the trainee takes more than the amount of leave days the company allows them to take.

A Reddit post capturing these terms for traineeships began trending on the Singapore subreddit, drawing over 200 comments and nearly double the number of upvotes.

Some netizens responding to the post said that host organisations can still provide better benefits to trainees but others pointed out that this may not be as likely as they might hope since they would have to offer such benefits on their own dime.

Concern about the benefits for trainees arise as more fresh graduates are turning to traineeships given the poor job climate in Singapore’s post-COVID economy.

Deputy Prime Minister Heng Swee Keat announced the SGUnited Jobs and Skills Package during his Fortitude Budget speech, last month. The package aims to create 100,000 jobs, internships and traineeships to support Singaporeans affected by the economic fallout caused by COVID-19.

While the dreams of many graduates who hoped to achieve their career ambitions, pay off their student loans and provide for their families were crushed by the scarcity of jobs, Manpower Minister Josephine Teo called traineeships a “stepping stone” for these new labour market entrants.

She said, in June: “While these traineeships may not be the same as a job, they will help young graduates to build networks, skillsets and resumes. This in turn will stand them in good stead in landing a permanent role when the hiring demand picks up.” The ruling party MP added:

“Such opportunities will allow our graduates to experience working in different industries, and gain clarity on what they may want to pursue later in life. 
“I encourage all our graduates – including those thinking of switching career paths – to stay open-minded and resilient. Do tap on the SGUnited Traineeships Programme to achieve your longer-term or new career goals. It will not always be an easy process, but the Government is here to walk this journey with you.”

DPM Heng made similar remarks, that same day. The Prime Minister-designate praised the persevering spirit of young Singaporeans who are affected in the post-COVID economy and said:

“For our youths, this is a challenging time to come of age and be in the job market. The road ahead will be difficult and fraught with uncertainty, but I am glad that our youths have remained resilient in the face of adversity. The pandemic might have set back their plans temporarily, but the virus will not stop them from fulfilling their potential.
“What will set our youths for success is the willingness to take the initiative and make the most of what they have. By turning anxiety into action, they can build a better tomorrow.”

Earlier, Senior Minister Tharman Shanmugaratnam said that Singapore residents needs to be realistic and consider other opportunities like temporary jobs and internships in cases where they cannot get a job. The head of the National Jobs Council added that Singapore will see a loss of jobs and even fewer new job openings in the next year, as the COVID-19 pandemic persists.

Fresh graduates turn to traineeships as job openings remain scarce in post-COVID economy

Tharman urges workers to be realistic and consider opportunities like internships if they cannot get a job

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