Annual leave for outsourced Progressive Wage Model workers to increase from 7 to 10 days from 2029

SINGAPORE: Outsourced workers covered by the Progressive Wage Model (PWM) will have their minimum annual leave entitlement raised from seven days to 10 days, with the increase to be implemented progressively from 2029, the Ministry of Manpower (MOM) said on Sunday (Jul 19).The move, announced in consultation with tripartite partners, will support outsourced workers across five PWM sectors - cleaning, security, landscape, lift and escalator, and waste management.Such workers are employed by service providers but work at client companies under outsourcing arrangements.About 60 per cent of outsourced workers in these sectors are expected to benefit from the increase, according to MOM. Under the Employment Act, employees are entitled to a minimum of seven days of annual leave in their first year of service.This increases by one day per year of service with the employer, up to a maximum entitlement of 14 days.However, MOM noted that outsourced PWM workers may not be able to benefit from these leave entitlements due to the nature of their employment arrangements. For example, when a service contract changes hands, workers may be rehired by the new service provider while continuing in the same role or at the same worksite. But their leave entitlement may be reset to the minimum seven days, despite having worked continuously in the role for many years. "This means that outsourced PWM workers may lose their accumulated leave benefits despite working in the same role continuously for many years," MOM said. The ministry added that tripartite partners had agreed to raise the minimum leave entitlement for such workers in order to "better reflect their continuous years of service", and so that their employment conditions "remain protected" even when their employers change. During the Budget debate in February, assistant secretary-general of NTUC and MP Melvin Yong (PAP-Radin Mas) had called on the government to raise the baseline leave entitlement for PWM workers in outsourced sectors from seven to 10 days.Mr Yong noted in February that many workers have their leave reset when service contracts change hands. "As a result, their leave stagnates at the statutory minimum of seven days, despite years of service in the same job scope," he then said."By setting a higher baseline within PWM, we strengthen retention, recognise accumulated service, and improve workforce stability – while allowing service providers and service buyers to price this transparently into contracts in a sustainable manner.""An increase in baseline leave entitlement will support the professionalisation of outsourced PWM sectors by strengthening retention and service continuity to build a resilient core resident workforce in these sectors," the ministry said.To give businesses sufficient time to adjust, the increase will be implemented in phases from 2029. "The specific implementation timeline will be further discussed by the respective sectoral tripartite clusters," MOM said."This will allow employers and service-buyers to plan ahead and incorporate the change into their contracts, and better manage the operational and cost impact."More details will be shared closer to the implementation date.The new minimum should not affect the annual increase in leave that outsourced employees are currently entitled to under the Employment Act, according to MOM. Workers who already receive leave benefits above the new minimum should also continue to receive them in line with their employment terms and the Act.MOM said it will continue to work with tripartite partners to ensure the smooth implementation of the enhanced leave entitlement to improve the well-being of outsourced PWM workers, while supporting businesses through the transition period.