The Ministry of Manpower (“MOM”) has proposed changes to the Work Injury Compensation Act (“WICA”). The proposed changes will include:
Requirement for mandatory work injury compensation insurance to cover wider spectrum of employees.
Employees on light duties to be compensated for difference between their post-injury salaries and their previous average monthly salaries.
Compensation limits to be increased by 10% from January 2020.
Process for claims to be streamlined
Insurers providing work injury compensation insurance to be licensed to sell standardised WICA-compliant policies.
The MOM will be accepting feedback as part of its public consultation on the amendments. The consultation period will close on 25 February 2019.
On 31 January 2019, the MOM commenced consultations on proposed amendments to the WICA and related regulations. The consultation period will end on 25 February 2019. Based on the usual time frame for the passage of such legislation, the amendments are likely to be in introduced in Parliament within a year’s time.
The WICA provides for a no-fault regime to allow employees to make claims for work-related injuries without having to take legal action. A claim is admissible so long as the injury arose out of and in the course of employment. The employee need not prove fault or negligence on anyone’s part.
Under the WICA, local and foreign employees who have sustained injuries or occupational diseases at work, or as a result of work, can file a claim with the Ministry of Manpower for medical expenses, medical leave wages or a lump sum compensation for permanent incapacity or death.
While the WICA has proven to offer effective protection to the vast majority of injured employees, the MOM has found that there have been instances where employees were not duly compensated and where processing times were long-drawn. The proposed amendments are intended to give greater assurance of compensation for employees and further speed up processing of claims.
Expanded mandatory insurance
Although an employer is required to compensate any employee who suffers a workplace injury, the purchase of work injury compensation insurance by employers is only mandatory in certain circumstances. Currently, employers are only required to purchase work injury compensation insurance for:
All employees performing manual labour; and
Non-manual labour employees (“NMEs”) working in factories who earn up to SGD 1,600 a month.
To provide assurance of work injury compensation to more employees, the MOM proposes to:
Extend mandatory insurance to NMEs working in non- factories; and
Increase the NME salary threshold for mandatory insurance to SGD 2,100 in April 2020 and then to SGD 2,600 in April 2021. This phased increase is intended to provide businesses with time to adjust.
Adjustments for employees on light duties and updates to compensation limits
Under the proposed amendments, injured employees who earn lower salaries due to being assigned light duties while recuperating will be compensated for the difference in their average earnings in the period prior to and after their injury.
There is currently a gap in the law whereby injured employees on medical leave are paid more than injured employees who continue to work with lighter duties. Currently, injured employees on medical leave are compensated with their Average Monthly Earnings (“AME”) based on their earnings (inclusive of variable components such as overtime pay and bonus) over the 12 months prior to their injury. However, as employees on light duties are paid their salary instead of the calculated AME, they ultimately receive lower salaries due to their inability to perform work with the same intensity. To address this, work injury compensation will be extended to employees on light duties such that they are compensated for the difference between their AME and salary while on light duties.
To process such claims, employers will need to report to the MOM all injuries resulting in light duties being assigned. This is in addition to current reporting for injured employees put on medical leave.
From January 2020, the MOM also proposes to increase the compensation limits for personal injury and death by 10% in line with the periodic updates to such limits every four years.
Faster claims processing
The proposed amendments also contain a streamlined procedure for processing work injury claims.
Under the proposed procedural changes:
WICA claims will be processed for all work injuries notified to the MOM by the employer without requiring any filing by the employee. The employee may however choose to opt out at any time prior to receiving compensation (e.g. where the employee chooses to file a civil suit).
Injured employees will be compensated based on their prevailing state of incapacity at a medical assessment occurring at least six months after the date of the accident. Doctors may request that assessments be conducted at a later date for complicated injuries which may take longer to stabilise.
Where there are no itemised pay slips or other documentation to enable AME to be calculated, compensation will be pegged at a multiple of the employee’s basic monthly salary with the multiple sufficiently high such that the derived amount will be higher than the actual AME for 75% of cases.
Work injury compensation insurers to be licensed to process all insured WICA claims
To speed up the claims process for insured WICA claims, the MOM proposes to license insurers to sell standardised WICA policies and process all claims for such policies. This means that such claimants need only deal with insurers for the making of insured claims.
Safeguards will be put in place to provide for oversight of WICA-licensed insurers by the Commissioner of Labour. Accredited WICA policies will also only be permitted to have a standard list of allowed exclusions. Fines will be imposed on insurers who sell non-approved work injury compensation policies.
Other amendments proposed include:
Increasing maximum fines for WICA offences due to failure to compensate or delays in compensating employees.
Enabling the Commissioner for Labour to assess validity of late objections to claims and to allow them if reasonable.
Clarifying of legal ambiguities and other measures to further streamline the process including:
Specifying that medical examination and consultation costs are claimable as part of medical treatment
Specifying that dental treatment will be considered medical treatment and medical leave provided by dentists shall be recognised.
Specifying that dependants of deceased employees do not require a grant of representation to make work injury claims.
Clarifying that mentally incapacitated employees should be treated in a similar manner to deceased employees for the purposes of allowing dependants to be located and to receive monies.
The changes are a welcome update to the current workplace injury compensation regime. While employees will benefit from the greater assurance of compensation and faster processing of work injury claims, the incremental costs for most employers is also expected to be manageable at less than 0.01% of annual total labour costs.
There is, however, an aspect of the proposed amendments which requires further clarity and it is expected that the MOM will provide further information in due course. This concerns the scope of the MOM’s plans to expand mandatory insurance coverage to include NMEs working in non-factories. Currently, many employers, ranging from banks to hotels and coffee shops, are specifically exempted from WICA insurance requirements under the Workmen’s Compensation (Exemption of Employers) (Consolidation) Notification. It is thus unclear if the MOM’s plans to expand mandatory insurance coverage will also include removing these exemptions.
Further details on the proposed amendments are available at the Government’s www.reach.gov.sg website.
For information or assistance on the issues discussed in this update, please contact:
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This material has been prepared for general informational purposes only and is not intended to be relied upon as legal advice. Please consult us or your legal counsel for specific advice on your circumstances.