Because You Asked: Your Questions At The #TIASG2016, Answered

April 19, 2016

Dragon Law had a booth this Tech in Asia Singapore – did you get a chance to mingle with Team Dragon?

This year’s conference attracted as many as 4,000 conference attendees and 200 participating startups from 22 different countries.

We had our Singapore Dragons Shermin and Lisa on the ground to showcase the Dragon Law app and how it makes legal easy, fast and affordable for small businesses. Attendees coming from all over Asia were keen to find out how legal technology can provide a smarter and cost-effective alternative to the traditional law firm, while still ensuring compliance.

Here are the most frequently asked questions about Dragon Law at the booth:

1. How exactly does your technology help users draft legally-binding documents 10 times faster and 5 to 10 times cheaper than a traditional lawyer?

Dragon Law’s unique SMART Document Builder guides you through the process of creating even the most complex legal documents from start to finish. Our simple question-and-answer interface gathers key insights about your business and helps you generate highly-customised documents that address your specific needs.

In a nutshell, an Annual Professional Plan gets you:

  • Unlimited access to over 400 documents for use in Hong Kong and Singapore,
  • Unlimited use of our SMART Document Builder (works in your web browser and optimised for mobile),
  • The ability to set sharing permissions to collaborate with team members and advisors; and
  • Access to our Client Service Team to answer any questions you have, right within the app or by phone – at no additional cost!

The result: No need for meetings with lawyers in fancy offices, going back and forth on endless email trails, bulky attachments, printing and scanning stacks of papers… All that time saved so you can concentrate on what’s important in your business!

Getting your questions answered via live chat within the Dragon Law app

2. How are you different from a regular template that I download online?

Because the Dragon Law SMART Document Builder is insight-driven, any legal agreement you generate via the app is highly-customised to suit the needs of your business.

Take for example a Non-Disclosure Agreement (NDA or Confidentiality Agreement). An NDA deals with the protection of confidential business information. Companies enter into NDAs because they want to protect themselves from information being shared without their consent. The need for an NDA can arise however in three ways:

  1. You are sharing confidential information with somebody,
  2. Somebody is sharing confidential information with you; or
  3. You are both sharing confidential information with one another.  

In each of these situations, it is essential that you use the correct form of NDA to protect your business. Our SMART Document Builder establishes these facts and builds you the legal document in the format that is most favourable towards your position.

Creating a Website Privacy Policy with Dragon Law is as simple as answering a few questions

Create your Website Privacy Policy for free

Start by creating a free account.
No minimum commitment, no credit card required.

3. So, is Dragon Law looking to replace lawyers?

Absolutely not. Our technology outlines and addresses the typical questions and standard clauses a small business owner must consider when entering into a legally-binding contract. We acknowledge that you may find yourself in a more complex legal situation where you will need legal advice and representation – this is when we will introduce you to our trusted network of lawyer partners, which includes leading global law firms.

Dragon Law has successfully unbundled the work that lawyers do. Our technology can be used to draft day-to-day and highly-complex agreements across the following stages of business:

See: Infographic: The six stages of starting a business

4. How is Dragon Law priced?

Dragon Law is software-as-a-service (SaaS). Subscribers to Dragon Law have access to more than 400 documents that are compliant with Singapore and Hong Kong law. Throughout your period of subscription you will be able to create, store and share all your legal documents in our cloud.

Our Upload and Sign feature makes the signing of documents completely fuss-free, especially for business owners who collaborate with global partners. Upload your own documents for storage, sharing or signing online. Think: No more back and forth with printing, scanning, and the post office! Our Professional Plan gives you unlimited access to our Client Services team.

5. Can I purchase a single document instead of a subscription?

A visit to the lawyers’ is held in the same regard as a visit to the doctors’ – and as a result it often doesn’t happen until you have a pressing problem to solve.

Today’s business owners know this traditional model no longer makes sense. Akin to investing in cloud accounting software (and an accountant to help you use it); CRM systems to manage your customer data; efficient, successful businesses use best-in-class legal documents that help them collaborate better with other companies, acquire serious customers, and raise finance.

Dragon Law is your legal department in the cloud. It is the single place to create, store, share and collaborate on legal documents. Our e-signing signature will let you fast-track negotiation processes by sharing the final contract with the other party immediately, so they can e-sign right away!

E-signing with Dragon Law

6. Are documents generated via the Dragon Law app legally-binding?

Our SMART Document Builder generates agreements that are fully legally-compliant in their respective jurisdictions.

There are times when the SMART Document Builder will invite you to add free text to your agreements. Professional Plan subscribers can take the additional step of requesting for a DoubleCheck, where a member of our Client Service Team will review your completed document to check your grammar and spelling.

As an optional third step, you may choose to request specific legal advice from a law firm in our network through an Independent Lawyer Review.  Our platform makes accessing legal advice simple, cost effective, transparent, and time-efficient. The lawyers we work with operate for great value and at fixed fees, so there are no unpleasant surprises when the bill arrives.

7. What if I need to add an additional clause to a template that Dragon Law has?

You will have the ability to download your document in a fully-editable word document format. Unlike a template, if you decide to make substantial edits or changes to your document at this stage, cross-referencing and numbering will all automatically update so you can be sure of the integrity of your agreement.

8. What if I need a legal document that is not present within the Dragon Law app?

Just tell us! Our clients are our best advisors when it comes to where our product should develop. When we first launched Dragon Law in Hong Kong 2014, we had 70 documents in our library. Today, we have over 400 – all thanks to the request of our clients. We are committed to continuously develop our product to suit your needs, and will be pleased to hear from you!

 

Do you have any more questions about Dragon Law?

Legal Tech is a new playing field – TechCrunch in 2014 said “legal technology is booming, with companies attempting to disrupt the legal space at every level and from every angle”. Barely a year later, Forbes noted that there were “hundreds of legal startups popping up all over the U.S. and Europe”.

Being one of Asia’s Legal Tech pioneers has come with lots of excitement, curiosity, as well as cynicism. A recent article by the FT has lawyers sneering at the idea that their work could ever be done by a website or app.

But here’s the truth: Few people these days can afford a lawyer. Smaller companies are taking enormous risks by ‘googling’ for legal advice. Corporations, too, are starting to rebel, following cost-cutting exercises to the legal department. Vodafone’s Group General Counsel, Ms Rosemary Martin, was quoted as a believer that technology can help legal departments cut costs even further.

While the Dragon Law app now serves only the Singapore and Hong Kong jurisdictions, it was refreshing for Team Dragon to note the significant interest coming from the rest of Asia and beyond. Thank you #TIASG2016!

Try it for yourself, the smarter way to manage legal that is easy, fast and affordable.

No minimum commitment, no credit card required.

Our Most Frequently Requested Documents, Their Uses, And The Clauses To Look Out For

April 6, 2016

There have been requests for more than 5,000 documents via the Dragon Law app to date.

Which documents were the most popular among small businesses? We investigated:

1. Confidentiality Agreement

What is it?

A legal contract, also known as a Non-Disclosure Agreement (NDA), which creates a relationship between parties to protect any type of confidential business information.

Use when:

  • Exchanging sensitive business information with business partners during commercial negotiation; such as information on pricing, product specifications, manufacturing process, market share or trade secrets.
  • Employing consultants or freelancers, or during the new employee recruitment process.
Key terms to agree on:

  1. A clear definition of the information to be kept confidential;
  2. Why you are exchanging information and for what purpose the information can be used;
  3. How long the agreement will be in place;
  4. What happens after the information is not needed anymore (e.g., at the end of the negotiation or specific purpose).

 

2. Employment Contract

What is it?

A contract of employment for an employee of your business.

Use when:

  • Employing staff
Key terms to agree on:

  1. Any period of probation and notice to be given during probation;
  2. What benefits the employee will receive;
  3. How much notice must be given to  terminate the agreement;
  4. How confidential information should be protected.
  5. For senior employees, it’s also worth including the following:
    1. Waiver of intellectual property rights;
    2. Whether they can follow outside business interests;
    3. What restrictions you will impose post-termination.

 

3. Consultancy Agreement

What is it?

A contract between a business and an independent consultant who is employed on a temporary basis.

Use when:

  • Engaging an independent consultant who is not an employee of your company.
Key terms to agree on:

  1. The number of hours the consultant will work;
  2. How the agreement will be terminated if the relationship doesn’t work out;
  3. Whether the consultant will have access to confidential information you want to protect;
  4. How any intellectual property created by the consultant is assigned to your company.

 

4. Shareholders’ Agreement 

What is it?

An arrangement between a company’s shareholders that describes their rights and obligations and how the company should be operated.

Use when:

  • Entering into business with others; even if they are family, close friends, or a new business partner.
Key terms to agree on:

  1. Actions of the directors which require shareholder approval;
  2. The number of shareholders required to approve certain actions;
  3. Issue of new shares;
  4. Transfer of existing shares;
  5. Agreed process for valuing shares;
  6. Rights that different classes of shares can have;
  7. “Tag-along” and ‘drag-along” rights that can affect minority shareholders;
  8. Resolution of disputes between shareholders;
  9. What happens when a shareholder wants to exit the company;
  10. Whether shareholders are restricted from competing with the business of the company after they exit; and
  11. Events that may trigger the sale or winding up of the company.

 

5. Website Privacy Policy

What is it?

A contract between website providers and users on how user data will be collected and used.

Use when:

  • Clarifying how your website will collect and use customer data.
Key terms to agree on:

  1. The nature of the information collected;
  2. How the information will be used;
  3. Who the information can be shared with;
  4. The cookies you use;
  5. Whether you use Google Analytics;
  6. Provision to the user of the option to receive or opt out of receiving direct marketing;
  7. Who the user should contact to exercise their rights under the Singapore Personal Data Protection Act, or Hong Kong Personal Data (Privacy) Ordinance.

 

Summary: Essential legal documents for running your business

✓ Confidentiality Agreement

✓ Employment Contract

✓ Consultancy Agreement

✓ Shareholders’ Agreement

✓ Website Privacy Policy

 

Create and customise these 5 legal documents with Dragon Law with an annual subscription fee. 

Find out how Dragon Law can help make legal easy, fast and affordable:

 

We Placed Close to 50 Entrepreneurs, Investors and Lawyers Into One Room. Here Are Some of Their Thoughts And Questions On Early Stage Funding

March 29, 2016

If you are in the process of fundraising for your startup, it is likely you will have asked yourself the following questions:

But is paying USD 500 an hour (Chambers and Partners) the only way to get these questions addressed by experts?

In Dragon Law’s last Legal Startup Academy, we sat an entrepreneur and investor down with two legal practitioners. Here are your questions on early stage funding, answered:


1. How have you or your clients raised funds for startups you have been involved in?

Tom: I have raised seed rounds from angel investors as Founder of Bakipa and Grow360. They were experienced investors (rather than friends and family) for the most part. Not only were these investors interested in the field we were operating in, they were also of great help towards connecting us to other investors. The startups I work with at Leo Tech now are looking to raise larger rounds for Series A. They speak with venture capitalists (VCs) who are focused on businesses with better traction.

Sarah: Where founders don’t have the resources to bootstrap or get investment from family and friends, crowdfunding is growing as an alternative. The Monetary Authority of Singapore (MAS) recently granted a Capital Markets Services Licence to a crowdfunding platform for the first time. Crowdfunding or pre-market sales sites can also be a useful way to test market interest in your product prior to launch. Be very careful, however, that you are using a reliable platform that is working in line with regulations.

My startup clients in New Zealand were developing high-tech products in the healthcare sector that required lengthy research and development time. They looked to VC funds that had a mixture of government and private backing, where the investors were prepared for a long lead time before they would see a return on their investment.

Elaine: Agreed. The usual avenues are: Family and friends, venture capitalists and angel investors.

See also:

Infographic: A guide to startup funding

2. Is documentation really that important if I am raising money from family and friends?

Tom: Definitely. Of course, everyone joins a business as a founder or investor believing it will all work out – but you must be prepared for the worst-case scenario. Conflicts among business partners can be made complicated by pre-existing family and friendship ties. Legal documentation provides a framework to manage any potential disputes in the best way possible, thereby reducing their impact on personal relationships.  

Sarah: Documentation is very important. This does not have to be complex; but should set out the expectations of both parties at bare minimum. For example, if your brother invests in your business, will he then have a say in how the business runs day-to-day? Do all parties understand how the investment is structured – is it a loan, purchase of equity, or combination?

Elaine: Start with your long-term business plan in mind. Having the right documentation in place from the beginning lays out the foundation for fundraising and other business activities in future.


3. What should a startup look at when picking the right VC?

Tom: Find out if the VC has a track record of investing in similar businesses. With a bit of digging, it is usually quite easy to identify other startups that a VC has in its portfolio. This helps you understand their interests as well as the expertise they bring to the table. Obviously, if you find out there is a direct competitor also in their portfolio, you may want to rule them out as potential investors.

Also think long-term: Can they participate in future funding rounds or, at least, provide access to a wider investor network? This means you can spend less time looking for investors, which will make your life as a founder so much easier!

Elaine: I agree with Tom – choose investors based on their interests, expertise and network. Research into how their portfolio companies have grown or benefitted. I would also add that you should look into the firm’s exit strategy and time horizon. Use this to eliminate any firm whose exit strategy does not fit well with your plans.

Sarah: Conduct a due diligence on potential investors, just as they will on you. What value do they add to the businesses they invest in? What level of day-to-day involvement or board representation do they wish to have, and will they be bringing their own connections into your management team? Will you be able to work well with these people?


4. Is getting on-board with an accelerator/incubator the right route for every startup?

Tom: No, they are not for every startup. Accelerators and incubators can be a great way to test the assumptions embedded in a very early stage startup, with the help of mentors (and perhaps cash investment). An inexperienced founding team will also stand to benefit greatly from a good accelerator.

However, if your startup has already reached product/market fit and is demonstrating significant traction, an accelerator is unlikely the right place for you.

Sarah: A lot of factors come into play when considering an accelerator or incubator. As your business continues to grow, it will stand to benefit from the brand recognition and network-effect from joining a highly-regarded accelerator.

In my opinion, an incubator programme may be ideal for a more complex product or service that requires a long R&D process.

On the other hand, if you are starting in an industry where there is little barrier to entry for new competition, bear in mind that some accelerator programmes require you participate in a large number of mandatory events – these take precious time away from you from focusing on your product.


5. What resources and tools are available for startups and investors on the topic of early stage funding?

Tom: There are a number of programmes available for early stage startups to test ideas. The JFDI Discover course is one of them. AngelList is an excellent resource for researching anything from valuations and startups with similar ideas, through to finding employees. From a legal perspective, read Brad Feld’s book Venture Deals for an overview of documentation and processes that are part of raising funds. The book aims to teach you how to “be smarter than your lawyer and venture capitalist”. You can also subscribe to Brad’s blog here.

Sarah: Startup- and entrepreneur-focused events are aplenty in Singapore. You will be surprised at how willing many founders and entrepreneurs are when it comes to sharing their expertise. Not only will you stand to learn a lot by attending one, you will also grow your network significantly. Another simple step is to follow major publications such as Tech in Asia and e27 to keep up-to-date with the angel investors/VCs/accelerators and incubators who are entering the Singapore market; and, on the investor front, monitor the up and coming startups who are looking for investment. There are, of course, also resources such as Dragon Law(!) who produce freely available content to guide you through the legal considerations for each stage of your business.

Elaine: Startups in Singapore should take full advantage of government support that is available to them. You can learn more about the eligibility criteria, requirements and considerations at Infocomm Investments and SPRING Singapore (ACE Startups Grant).


6. When is the right time to start looking out for funding (and to start giving away equity)?

Tom: It is difficult to provide an absolute answer to this. My advice is for you to test as many assumptions as possible before beginning to raise funds. You can begin by selling an early version of the product and through this gather feedback from as many potential customers as possible; or evaluate other startups who are trying to solve a similar problem. Beyond this, you will most likely need a minimum viable product and some traction in order to raise from angel investors.

Having a solid core team in place will also help boost investor confidence. A track record of having worked together for considerable time is a huge plus – too many startups fail as a result of founders falling out.

Minimise the impact of founder conflict with a Shareholders’ Agreement:

 

Elaine: You are ready to start fundraising when you have a pragmatic business plan that poises your startup to take off on an accelerated growth path. Be prepared to give up a part of your equity in exchange for a high valuation – this prevents a huge dilution of your own stake. This possible loss of control/decision-making power calls for a certain level of mental preparedness before you begin your search for funding.


7. What are the key points of negotiation for a ‘win-win’ between investor and founders?

Tom: Many founders get overly-focused on valuation at early stages. This can result in negative repercussions in some cases. An experienced and reputable investor will generally be able to provide good insight into what a fair valuation is. It is also important for you to understand all terminology in investment documents to ensure future scenarios are aligned with your expectations (e.g. liquidation preferences).

You should also know what your walk-away point is i.e. how much equity are you willing to give away in the investment round? Have this clear in your mind before you engage in serious talks. Finally, if you are lucky enough to be in a position to do so, it is always good to talk to as many investors as practical in order to get a better sense of how your business is perceived. In an ideal scenario, you’d want to have more than one offer of investment.   

Sarah: There is a saying that a “win-win” happens when both parties are equally unhappy: Accept that consensus will take time and don’t allow yourself to be railroaded. Negotiate in a mature manner so the investor will respect you as a business partner going forward.

For an investor, often taking advantage and requiring unconscionable terms can backfire. A founder may begin to resent the situation and the development of their idea can falter, leaving you with favourable terms but no value in the business to see any benefit from those terms.

Elaine: The bottom-line is for both investors and founders to be absolutely clear on what they want.


8. Singapore is an expensive city to live in. How does a Founder justify his request for a high salary?

Tom: Bluntly speaking, if you expect a high salary, perhaps a startup isn’t the right place for you. You should consider yourself lucky if you achieve break-even in the early years of a startup. To me, this is more about personal runway and will undoubtedly depend on individual cost of living.

In cases where it is not possible to get a salary that fully covers your cost of living, founders need to calculate how much personal runway they have until it is no longer viable. This runway should allow time for the business to get to a point where it can sustain a higher salary or for other options to be worked out.

As much as possible, any additional funds should be re-invested toward product or business development.

Sarah: Investors will usually want (and should) incentivise founders to stay on to build the business, especially in a startup’s early stages. It is important for both parties to find the right balance between what is essential to live in a city like Singapore; yet at the same time is sensible for the business. The best way for you to achieve this is to back your salary requests by well-researched numbers that address the cost of living in Singapore.

Read more:

 

The above is the transcript of a panel discussion that took place at one of Dragon Law’s Legal Startup Academy sessions.

 

About the Dragon Law Legal Startup Academy

The Dragon Law Legal Startup Academy is a 6-module series aimed at empowering business owners in Singapore with essential legal knowledge for every stage of the business. View our full Academy listing here.

To be notified of when our next session runs, sign up for the Dragon Law newsletter here or subscribe to our event page on Facebook.

 

About the Panelists

Tom Duncan has recently joined Leo Tech as Head of Investment Operations. Leo Tech is a technology company based in Singapore that provides technology consulting and development services for corporates and has an investments team focused on startups. Tom is an active early stage investor and has co-founded two startups – Bakipa and Grow360. Prior to this Tom spent more than a decade in Investment Banking, including most recently at Barclays in Singapore focused on capital markets. He holds an Executive MBA from INSEAD.

Sarah Hales is Sales Manager at Dragon Law in Singapore. Sarah started her career as a Commercial Lawyer in New Zealand, before moving to Australia to manage a team of Estate Planning lawyers at NAB. She now enjoys working with a wide range of startups and SMEs, allowing them to access legal documents cost-effectively and increase efficiency in how they manage legal matters within their business.

Elaine Beh is a Partner at Virtus Law LLP, part of the Stephenson Harwood (Singapore) Alliance. She has substantial experience advising small and medium enterprises in their corporate and fundraising transactions. Clients value Elaine’s “hands-on” approach to matters.

 

 

 

About Dragon Law

Dragon Law’s technology helps companies in Singapore and Hong Kong build legal documents they need at every stage of the business. Its interactive platform allows users to create, customise and store legal documents in the cloud for sharing and signing online. Our free trial lets you to create up to two legal documents tailored to your business – start by registering here.

 

 

About Stephenson Harwood (Singapore) Alliance

The Stephenson Harwood (Singapore) Alliance offers clients an integrated service in multi-jurisdictional matters involving permitted areas of Singapore law and is widely recognised as being a top-tier firm in asset finance, shipping and international trade, corporate, covering the Southeast Asia from its Singapore hub.


For media-related enquiries, please email
shermin.oh@dragonlaw.com.sg.

The New Dragon Law Features You Asked For: Try Them Now!

March 23, 2016

Our team has been working tirelessly over the past few weeks to introduce some new improvements to the Dragon Law app. We are very excited to announce that you can now:

1. Make payment from within the app

Some of you are not on PayPal – we heard you. Our latest payment improvements bring you a seamless and secure payment experience within the app:

If you use this payment method, you will receive an email and in-app notification if your subscription is expiring in the next 60 days. The subscription will auto-renew three days before it expires – so you can go back to worrying about other important things for your business.

Only users with Administrator status are able to adjust payment details and purchase add-ons. Loyal PayPal fans need not sulk: Of course, PayPal is still available as an option if you like.

 

2. Better organisation and sharing

With bulk-select, moving all documents from one folder to another is a breeze:

Share documents, and add comments to recipients:

3. Upload & Sign, now in HD

The quality of your newly-uploaded documents are now in higher resolution:

 

4. Custom notifications

At the moment, all Dragon Law users receive a prompt when:

  • A document is complete and eligible for a “DoubleCheck” by a legally-trained Dragon,
  • A document is missing signatories; or
  • Signing is cancelled.

You may now decide if you would like to be alerted for these events using custom notifications in your Settings:

And if you decide to “Never show this again”, we promise we won’t!

 

5. Faster and safer electronic-signing

Your documents are kept secure when we limit access only to the email addresses you nominate as signees. All signees were prompted to register as a Dragon Law user to complete the process.

Now, we’ve made it even more efficient: Your invited signee no longer has to complete a long registration process – just create a password and he/she will be allowed to sign:

 

 

6. Trade Mark descriptions within the app

What could be easier than Googling? Not having to Google at all. In-app descriptions help you determine which class of goods and services you can to register your trade mark for, right within the app:

You’ve got to see it to believe it:

 

Which one of these updates was your favourite? Tell us in the comments!

Dragon Law’s had an exciting two years and we continue to be committed to delivering a better experience for our users. We want to make legal easy, affordable and fuss-free for you. Keep telling us how.

Amendments To the Employment Act: What It Means For Your Business

March 16, 2016
Post updated April 13th 2016.

Employers in Singapore have three new requirements under the Employment Act. Effective 1 April 2016, you are required to:

  1. Issue key employment terms (KETs) in writing to employees covered under the Employment Act.
  2. Issue itemised payslips to employees covered under the Employment Act.
  3. Maintain detailed employment records of employees covered under the Employment Act.

1. Key Employment Terms (KETs) in an employment contract

Why key employment terms?
KETs are aimed at helping employees to better understand their employment terms and benefits.

Who is it for?
Employers must issue KETs in writing to all employees who:

  • Enter into a contract of service on or after 1 April 2016,
  • Are covered by the Employment Act; or
  • Are employed for 14 days or more.

When should I issue key employment terms to employees?
You must issue KETs to employees within 14 days from the start of employment.

What should I include in the key employment terms?
KETs must include the items below:

  1. Full name of employer
  2. Full name of employee
  3. Job title, main duties and responsibilities
  4. Start date of employment
  5. Duration of employment (if employee is on fixed-term contract)
  6. Working arrangements, such as:
    1. Daily working hours (e.g. 8.30am – 6pm)
    2. Number of working days per week (e.g. six)
    3. Rest day (e.g. Saturday)
  7. Salary period
  8. Basic salary. For hourly, daily or piece-rated workers, employers should also indicate the basic rate of pay (e.g. $X per hour, day or piece)
  9. Fixed allowances
  10. Fixed deductions
  11. Overtime payment period (if different from item 7 salary period)
  12. Overtime rate of pay
  13. Other salary-related components, such as:
    1. Bonuses
    2. Incentives
  14. Type of leave, such as:
    1. Annual leave
    2. Outpatient sick leave
    3. Hospitalisation leave
    4. Maternity leave
    5. Childcare leave
  15. Other medical benefits, such as:
    1. Insurance
    2. Medical benefits
    3. Dental benefits
  16. Probation period
  17. Notice period

Exceptions:
You may leave out any terms that are inapplicable. For example, if the employee is a PME and overtime pay does not apply, the KETs issued do not need to include items 11 to 12.

Source: Ministry of Manpower

How can I issue key employment terms to employees?
You can issue key employment terms in either soft or hard copy. Handwritten copies are also accepted. Common KETs (e.g. leave policy and medical benefits) can be provided in employee handbook or via the company intranet.

All required key employment terms are present in Dragon Law’s employment contracts.

2. Itemised payslips

Why itemised payslips?
Itemised payslips will help employees better understand how their salary is calculated.

Who is it for?
You must issue itemised payslips to all employees covered under the Employment Act.

When should I issue payslips?
You should issue payslips to employees at least once a month, together with salary payment. Should this be impossible for whatsoever reason, you must issue the payslip within three working days of salary payment.

In the case of termination or dismissal, you must provide the payslip together with any outstanding salary payment.

What should an itemised payslip include?
An itemised payslip must include the items below:

  1. Full name of employer
  2. Full name of employee
  3. Date of payment (or dates, if the payslips consolidates multiple payments)
  4. Basic salary. For hourly, daily or piece-rated workers, indicate all of the following:
    1. Basic rate of pay, e.g. $X per hour
    2. Total number of hours or days worked or pieces produced.
  5. Start and end date of salary period
  6. Allowances paid for salary period, such as:
    1. All fixed allowances, e.g. transport
    2. All ad-hoc allowances, e.g. one-off uniform allowance
  7. Any other additional payment for each salary period, such as:
    1. Bonuses
    2. Rest day pay
    3. Public holiday pay
  8. Deductions made for each salary period, such as:
    1. All fixed deductions (e.g. employee’s CPF contribution)
    2. All ad-hoc deductions (e.g. deductions for no-pay leave, absence from work)
  9. Overtime hours worked
  10. Overtime pay
  11. Start and end date of overtime payment period (if different from item 5 start and end date of salary period)
  12. Net salary paid in total

Exceptions:
You may leave out any terms that are inapplicable. For example, if overtime pay does not apply to an employee, his/her payslip need not include items 9 to 11.

You may consolidate payslips if you make payments more than once a month. The consolidated payslip must contain details of all payments made since the last payslip.

Source: Ministry of Manpower

How should the itemised payslips be delivered?
You may deliver itemised payslips in soft or hard copy. Handwritten copies are also accepted.

Remain compliant without all the administrative hassle:

3. Keeping records

What is it?
You must maintain records for all employees covered by the Employment Act.

For whom should I keep records for, and for how long?

  • For the last two years for current employees
  • Records should continue to be kept for one year after the employee leaves employment

How should the employee records be kept?
Employee records can be kept in soft or hard copy. Handwritten copies are also excepted.

What should I record?
The records are in two categories:

  • Employee records
  • Salary records

Employment records

  1. Address
  2. NRIC number (for non-citizens, work pass number and expiry date)
  3. Date of birth
  4. Gender
  5. Date of starting employment
  6. Date of leaving employment
  7. Working hours, including duration of meals and tea breaks
  8. Dates and other details of public holidays and leave taken

Source: Ministry of Manpower Singapore

Salary records
See table above.

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Failure to comply

Failure to comply with the requirements on written KETs, itemised payslips and employment records will be penalised a “civil breach” and attract administrative penalties.

Penalties for civil breaches can result in MOM issuing an order to the employer to rectify the breach or in financial penalties of $100 to $200 per employee or occurrence, depending on the type of breach. A failure to comply with MOM’s order will constitute a criminal offence, which attracts more severe penalties of fines up to S$5,000 and/or imprisonment of up to 6 months.

 

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