Outsourced PWM workers to see minimum annual leave rise to 10 days

Outsourced workers in five specific sectors under the Progressive Wage Model (PWM) will have their minimum annual leave entitlement increased from seven days to 10 days. The Ministry of Manpower (MOM) announced the change on Sunday, July 19, stating that the increase will be implemented progressively starting in 2029.

The policy shift targets workers who are employed by service providers but stationed at client companies. According to MOM, approximately 60 per cent of outsourced workers in the cleaning, security, and landscape sectors are expected to benefit from the rise. This estimate is based on available data showing that a majority of these workers currently receive leave entitlements below the new 10-day requirement.

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Addressing the "Reset" Problem

Under the standard Employment Act, employees typically receive seven days of annual leave in their first year, with an additional day added for every year of service up to a maximum of 14 days. However, MOM noted that outsourced workers often fail to benefit from this accumulation due to the nature of outsourcing arrangements.

When a service contract changes hands, workers are often rehired by the incoming provider. A common employment practice in these sectors is to reset the worker's leave entitlement to the statutory minimum of seven days, even if the individual has performed the same role at the same site 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 stated.

The decision to raise the baseline follows advocacy from the National Trades Union Congress (NTUC). During the Budget debate in February, NTUC assistant secretary-general and MP Melvin Yong called for the increase to 10 days to prevent leave from stagnating at the statutory minimum. Yong argued that a higher baseline would recognize accumulated service and improve workforce stability while allowing service buyers and providers to price the cost into contracts transparently.

Scope and Implementation

The enhancement applies to five PWM sectors:

• Cleaning
• Security
• Landscape
• Lift and escalator
• Waste management

MOM clarified that the new minimum will not interfere with the annual leave increases workers are already entitled to under the Employment Act. Furthermore, workers who already receive more than 10 days of leave will continue to do so based on their existing employment terms.

The 2029 start date is intended to provide businesses with a window to adjust. Specific timelines will be determined by sectoral tripartite clusters, allowing employers and service-buyers to incorporate the operational and cost impacts into future contracts. MOM stated the move is intended to support the professionalisation of these essential service sectors by strengthening retention and service continuity.

The Broader PWM Framework

The Progressive Wage Model, first introduced by the NTUC in June 2012, is designed to uplift lower-wage resident workers through skill upgrading and productivity milestones rather than a single legislated minimum wage. It applies to Singapore citizens and permanent residents.

Beyond leave entitlements, the framework includes several mechanisms to support businesses and workers:

Mechanism	Purpose/Detail
Progressive Wage Credit Scheme (PWCS)	Government co-funding of wage increases.
Progressive Wage Mark	An accreditation scheme recognizing firms that pay progressive wages, helping them gain visibility with corporate buyers.

Failure to adhere to PWM standards can lead to fines or the loss of eligibility to bid for government contracts.

What to Watch Next

As the 2029 implementation date approaches, stakeholders should monitor the following:

• Sectoral Timelines: Announcements from tripartite clusters regarding the exact phased rollout of the 10-day leave minimum.
• Contract Renegotiations: How service providers and buyers integrate the higher leave baseline into new service contracts.