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Wage woes: Some local employers plan to scrap staff bonuses this year

Wage woes: Some local employers plan to scrap staff bonuses this year
Other employers are still going ahead with plans to pay their staff a bonus on top of the annual wage supplement.
PHOTO: The Straits Times / Kua Chee Siong

Some employers in the private sector plan to not pay any bonuses to their staff this year. This is similar to the Government announcing there would be no bonus paid to civil servants at the year's end, given the weakened economic outlook caused by the Covid-19 pandemic.

Others, however, are still going ahead with plans to pay their staff a bonus on top of the annual wage supplement, or 13th month bonus.

Mr Nick Lee, director of IT services firm AIT Technologies, said his firm has been making a loss this year as client projects were delayed amid the coronavirus outbreak. He will not be able to pay his staff an annual bonus or the 13th month bonus.

"We already had to let go of two people earlier this year, but the majority of our staff have not had their salaries cut. Saving our company is the priority now," he said.

Dr Kevin Cheong, executive director of local attraction Sentosa 4D AdventureLand, also said it would not be possible for him to pay a bonus to staff.

"With as good as half the year's income wiped out overnight, all of us are struggling, even after we have reopened our doors to visitors."

Dr Cheong, who is also chairman of the Association of Singapore Attractions, said he would not be surprised to see most tourism operators doing the same.

The two men were responding to yesterday's announcement by the Public Service Division (PSD) that Singapore's 85,000 civil servants will not receive any year-end bonus this year.

This means they will not be receiving any annual variable component for the entire year as mid-year bonuses were also not paid out earlier this year.

Civil servants will still receive the non-pensionable annual allowance, or 13th month bonus, of one month's pay.

Mr Dainial Sani Lim, group director of immigration consultancy Cayman Group Holdings, will still be paying the 13th month bonus to his staff, and also plans to continue paying annual performance bonuses.

Though revenues have been slightly affected by Covid-19, his firm is not as hard-hit.

"Our bonus is tied to our company's performance, but because of Covid-19, I reduced the group performance target by about 20 per cent... If we hit this target, we will still be able to give out bonuses," said Mr Lim. "Even though times are difficult, everyone still has to pay the bills."

Mr Ho Meng Kit, chief executive of the Singapore Business Federation, said the public sector's non-payment of the year-end bonus is a signal for the private sector to be prudent in managing its wage costs. He noted that the outlook for businesses over the next year remains highly uncertain.

"In view of (this), we would expect businesses to prioritise the management of their wage costs," he said.

Meanwhile, the PSD said it will continue to give special consideration to lower-wage civil servants, with around 2,400 staff in lower pay grades receiving a one-time lump sum payment of $1,200.

Mr Raman Kathavarayan, general secretary of the Amalgamated Union of Public Daily Rated Workers, cheered the move to provide this payment to lower-wage workers as it would give them much-needed encouragement.


Mr Sanjeev Kumar Tiwari, general secretary of the Amalgamated Union of Public Employees, said the union is appreciative that the 13th month bonus has been maintained for all public officers.

A civil servant in his 30s who declined to be named said he is not surprised at the news about the year-end bonus.

"(This is) because year-end bonuses have always been tied to the economy." However, he hopes that his performance bonus, which is paid out in March, will not be affected.

This article was first published in The Straits Times. Permission required for reproduction.

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