Major changes to Singapore’s work injury compensation laws are set to come into effect, increasing liability for employers. Here’s what you need to know
Changes to Singapore’s work injury compensation laws came into effect on September 3 and will lead to enhanced protection for employees in the city-state.
The Work Injury Compensation Bill 2019 was passed into parliament, with some changes due to kick in next January. The reforms will lead to a significant shakeup of workplace injury risk and insurance in Singapore. Employers face heightened liability, and insurance markets are set to react to the new developments.
At a time when COVID-19 is putting employer response and duty to keep the workplace safe to the test, the new law adds a further dimension. According to the Ministry of Manpower (MOM), “the Work Injury Compensation Act [WICA] covers employees who contract diseases from biological agents, including COVID-19, arising from and in the course of work”.
From 1 January 2021, compensation limits under the WICA will be raised to S$225,000 for death, S$289,000 for permanent incapacity, and S$45,000 for medical expenses.
From April next year, all employees doing non-manual work and earning up to S$2,100 per month (up from S$1,600 per month) will need to be covered by work injury compensation insurance. A year later, that monthly threshold will be increased from S$2100 to S$2600.
Previously, employers were only required to purchase WIC [work injury compensation] insurance for manual employees, as well as non-manual workers in factories earning up to $1,600 a month.
Furthermore, employees on light duties, as well as those on medical and hospitalisation leave due to work injury, could be compensated for up to a year of lost earnings from the date of an accident.
Greater liability for employers
Under the new regime, Singapore’s Labour Commissioner will prescribe core standard terms for WICA compliant policies. Only approved insurers will be able to sell the policies. In addition, Singapore has moved to streamline the claims process for work injury claims. WIC insurers, rather than the labour department, will process the claims.
StrategicRISK spoke with Asfian Mohaimi, a partner at Singapore law firm Wong Partnership LLP, about the potential impact of the law changes. He says workplaces will be under more scrutiny and those with poor safety records will pay higher premiums.
“Employers should note that the designated WIC insurers are now required to share policy and claims data with the MOM. MOM would then share this information with all designated WIC insurers. This means that companies with a poor safety record would have to pay a higher premium compared to companies with a good safety record or with a no claims history. This is to ensure that the safer companies would no longer subsidise the less safe companies.”
Workplaces will not be able to reduce policy coverage under their WIC insurance policies, and will need to ensure their insurer is WICA compliant. The claims process will make it easier for workers to get compensation.
“For cases of fatality or serious injuries, claimants would no longer need to file claim applications,” he says. “These cases would be placed under the “auto-claim” mechanism where the claims processing would commence once MOM or the insurer is notified of the accidents.
“For Permanent Incapacity claims, compensation would be based on the prevailing state of incapacity within six months from the date of the accident. Claims processing would start once an accident report is made. Previously, the claimant would need to wait until the injury is fully stabilised before a claim for PI may be assessed.”
All companies in Singapore will need to readjust their insurance arrangements.
“Employers need to check if their existing insurer is a WICA designated insurer. The list of designated insurers that have been licensed to provide WICA 2019 insurance policies may be obtained from MOM,” says Mohaimi.
Companies are only at greater risk of being sued if they fail to comply with the revised measures, he adds.
“For instance, employers are now required to report all work-related medical leave or light duties to MOM. Employees on light duties due to work injury are to be compensated for their lost earnings.”
Companies will face harsher penalties for failing to comply, he warns.
“Employers should also note that it will be an offence for any person who fails to provide information or document necessary for claims processing when directed by the Commissioner. It will also be an offence for any employer which fails to deposit compensation with the Commissioner when directed.”
“The maximum fine for the existing offence of non-payment or late payment of compensation to the employee will be increased from S$10,000 to S$15,000, while the maximum fine for second or subsequent conviction of WICA offences will be doubled.”
Mohaimi says compliant companies should not be too concerned about the new regime. “Employers who comply with the requirements and who maintain a good safety record may enjoy lower premiums for their WICA insurance policies.”