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NWC recommends 6% to 8% pay rises for lower-wage workers, highest since 2021

Lower-wage workers in Singapore could receive built-in wage increases of 6 per cent to 8 per cent under the National Wages Council (NWC) guidelines for 2026/2027, the highest recommended range since quantitative wage guidelines were introduced in 2021.The Government accepted the guidelines on Monday (Oct 19), which will apply from Dec 1, 2026, to Nov 30, 2027. The recommendations for...

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NWC recommends 6% to 8% pay rises for lower-wage workers, highest since 2021
NWC recommends 6% to 8% pay rises for lower-wage workers, highest since 2021

Lower-wage workers in Singapore could receive built-in wage increases of 6 per cent to 8 per cent under the National Wages Council (NWC) guidelines for 2026/2027, the highest recommended range since quantitative wage guidelines were introduced in 2021.

The Government accepted the guidelines on Monday (Oct 19), which will apply from Dec 1, 2026, to Nov 30, 2027. The recommendations for lower-wage workers apply to employees earning a gross monthly wage of up to $2,800.

The recommendations reflect Singapore's stronger-than-expected economic performance and continued productivity growth, while allowing employers to calibrate wage increases according to their business performance and prospects.

Under the guidelines, employers that have done well and have positive business prospects should provide lower-wage workers with a built-in wage increase at the higher end of the 6 per cent to 8 per cent range, or at least $135 to $170, whichever is higher.

Employers that have performed well but face uncertain business prospects are encouraged to provide increases around the middle of the recommended range.

For employers that have not performed well but remain profitable, the recommendation is to provide an increase at the lower end of the 6 per cent to 8 per cent range, or at least $120, whichever is higher.

A new fourth category has also been introduced for employers that have not performed well and are unprofitable. These employers are recommended to provide lower-wage workers with a built-in wage increase of at least $120.

The NWC also encourages employers that have done particularly well and have the capacity to do so to provide wage increases above the recommended levels.

"The guidelines recognise that employers have different capacities to raise wages for their lower-wage workers, depending on their business performance and outlook," NWC chairman Hsieh Fu Hua said during a press conference on Monday.

"Even as we continue to push to uplift these workers, we need to provide greater flexibility, and that's why this new fourth category of employers is an important change to the guidelines."

Economy grows 6 per cent in first three quarters

The guidelines come amid stronger-than-expected economic growth, although performance has varied across industries.

Based on advance estimates, Singapore's economy grew by 6 per cent year-on-year in the first three quarters of 2026. The Government has projected full-year growth of between 4.5 per cent and 5.5 per cent.

Labour productivity, as measured by real value-added per actual hour worked, rose by 3.8 per cent year-on-year in the first half of 2026, while overall unit labour cost fell by 0.8 per cent as productivity growth outpaced the increase in labour costs per worker.

However, growth has been uneven. Sectors benefiting from global demand related to artificial intelligence, including the electronics and precision engineering clusters, performed strongly, while consumer-facing industries such as food and beverage services faced weaker conditions.

The Government has called on employers to provide appropriate wage increases and variable payments to recognise employees' contributions, while taking into account their business performance and prospects.

The NWC also urged employers to take a "positive-leaning" approach to wage increases and reward employees with wage increases and variable payments that are fair and sustainable.

SNEF, NTUC support NWC recommendations

The Singapore National Employers Federation (SNEF) welcomed the recommendations, highlighting the need to balance efforts to raise workers' wages with the differing financial circumstances of businesses.

SNEF also noted that some businesses remain unprofitable and have limited capacity to raise wages, making the new fourth category an important addition to the guidelines.

The federation said it would step up outreach efforts, including employer briefings and industry engagements, to encourage businesses to adopt the recommendations.

SNEF president Kuah Boon Wee said the guidelines recognise the reality of a "K-shaped economy", where business performance and outlook vary significantly across sectors.

The National Trades Union Congress (NTUC) also welcomed the guidelines, noting that the recommended 6 per cent to 8 per cent built-in wage increase for lower-wage workers is the highest since quantitative wage guidelines were introduced in 2021.

It urged employers to adopt the recommendations and ensure that all workers, including professionals, managers and executives, benefit from Singapore's economic progress and productivity gains.

NTUC also called for continued investment in skills upgrading as artificial intelligence transforms jobs, including providing workers with protected training time to prepare them for changing job demands.

The guidelines are recommendations rather than mandatory wage increases. Employers are encouraged to implement them in a way that reflects their financial performance and business outlook, while continuing efforts to uplift lower-wage workers.

asyiqin.nadzri@asiaone.com

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