Mandatory wage increase for cleaners with Progressive Wage Model review

Model ID: 63141681-5f16-4c10-83ed-1ebb2933c81a Sitecore Context Id: 63141681-5f16-4c10-83ed-1ebb2933c81a;

The Progressive Wage Model (PWM) for the cleaning industry was first mooted by NTUC in August 2012 to provide a clear pathway for cleaners to earn higher wages and enjoy career progression as they upgrade their skills and become more productive. The first set of recommendations was released by the Tripartite Cluster for Cleaners (TCC) on 18 October 2012, and the PWM for the general cleaning industry was fully implemented under the cleaning business licensing regime in September 2015 via the Order imposed by the Commissioner for Labour.

 

Since the release of the TCC’s report in 2012, the wages of cleaners have increased. Median basic and gross wages of full-time resident cleaners grew by 9% and 12% per annum respectively from 2012 to 20151. In June 2015, the median basic and gross wages of full-time resident cleaners were $1,100 and $1,200 respectively.

 

However, the TCC observed that more needs to be done to ensure that cleaners achieve sustainable real wage increases. Despite efforts to raise the standards and image of the sector, the industry continues to face manpower challenges such as high turnover. Cleaners may also experience a reset of their wages to the starting PWM wages when service providers are changed. The TCC therefore finds it timely and appropriate to review the PWM to ensure its relevance as well as enhance the adoption of progressive wage practices in the cleaning industry.

 

New PWM Recommendations

 

As part of the PWM review, the TCC had consulted service buyers and providers covering about 70% of the total workforce of the cleaning industry. These engagements improved the TCC’s understanding of the PWM’s impact on the cleaning industry, as well as the on-going challenges faced by businesses and workers.

 

The TCC has completed the review of the PWM and recommends:

The TCC recommends a total increase of $200 to the PWM basic wage levels across all the three cleaning sub-sectors by 2019, starting with a $60 annual increase in 2017 and in 2018, followed by $80 increase in 2019.

 

To ensure that cleaners enjoy sustained wage growth in line with productivity improvements and better service delivery, the TCC recommends an annual increase of 3% to the PWM wage levels from 2020 to 2022 across all three cleaning sub-sectors under the PWM. The TCC expects the recommended schedule of increases to help the industry better plan and budget for future cleaning service contracts. 

 

In addition, the TCC recommends an Annual Bonus equivalent to two weeks of basic monthly wages to be paid out to workers from 2020. The TCC believes that the Annual Bonus will enable employers to better attract and retain their workers. It will also help uplift workers’ total income levels and serve as a form of savings for them. With better retention rates, employers will be more incentivised to train their workers, while workers will be more motivated to stay longer in the same companies when there are more training and upgrading opportunities. The TCC recommends that the Annual Bonus be paid on an annual or bi-annual basis to workers who have been employed by the same business for at least 12 months.

 

A summary of the above changes are depicted in the below table:

 

The TCC further encourages cleaning businesses to adopt minimum-maximum wage ratios of: (i) 1.2 for all job tiers below multi-skilled cleaners cum machine operators; and (ii) 1.3 for multi-skilled cleaners cum machine operators job tiers and above. This facilitates the payment of increments to better performing, more experienced and productive workers, above the PWM wage levels.

 

Implementation of New Recommendations

 

To ensure that the new PWM wage levels and Annual Bonus are implemented consistently across the industry, the TCC recommends that the adjustments to the PWM basic wages, schedule of increases and Annual Bonus be implemented under the cleaning business licensing regime through the Order imposed by the Commissioner for Labour in the relevant years.

 

Taking  into  consideration  industry  feedback  and  the  current  wages  of cleaners, the TCC recommends providing a lead time of at least six months for the industry to adopt the new PWM wage levels. Hence, cleaning businesses with new service contracts that take effect from 1 July 2017 should adopt the PWM wage schedule for 2017. For existing service contracts that take effect before 1 July 2017, cleaning businesses will have until 1 July 2018 to pay their cleaners wages according to the PWM wage schedules for 2018 onwards. 

 

The TCC also recommends that service buyers renegotiate existing contracts with their service providers to take into account the new PWM wages for cleaners. Service buyers are discouraged from exercising the option to extend existing contracts unless they are prepared to vary contract prices to take into account the new PWM wage schedules going forward.

 

A Better Future for the Cleaning Industry

 

The new features of the PWM will lead to mutually beneficial outcomes for all stakeholders. Cleaners will enjoy sustained wage growth and progress in their careers, commensurate with productivity improvements and better skills. Cleaning businesses can better attract and retain quality workers, and will be more incentivised to invest in training their workers to reap productivity gains. Service buyers and consumers will in turn benefit from more reliable and better cleaning services delivered by a more motivated and productive workforce. Overall, the cleaning industry and its workers will be better equipped to participate in Singapore’s transformation towards a more innovative, productive and inclusive society.

 

NTUC Assistant Secretary-General Zainal Sapari, who is also Chairman of the TCC, said, “The latest enhancements to the PWM for the cleaning industry will help support on-going efforts to professionalise the sector. We strongly encourage service buyers and service providers to work closely together to explore productivity solutions to enhance work processes. We also urge cleaners to constantly upgrade their skills so that they can take on higher value-added jobs in the future.”

 

# # #