Singapore Planning Penalties for Wayward Firms in Virus Push

(Bloomberg) -- Singapore is working on potential penalties for companies that don’t follow regulations on social distancing and telecommuting during the coronavirus crisis, the country’s manpower minister said.

Currently only some 40% of workers in the city’s Central Business District are following government directives to work from home, Minister for Manpower Josephine Teo told Bloomberg Television’s Haslinda Amin Wednesday.

“This is not nearly as far as we need to go,” Teo said. “We want to get the message out to companies that it’s in your own interest that you minimize human contact.”

Last week the government ordered more than 30 companies to stop work immediately after it found they hadn’t been following safe-distancing measures, according to the Straits Times. It will be an offense for employers not to put in telecommuting measures where the nature of the work permits it, the authorities have said.

As far as penalties for companies that don’t follow the guidelines, “the regulations are being worked out,” Teo said Wednesday.

Widespread Pain

The global pandemic has walloped the trade-reliant city state, with the Monetary Authority of Singapore now expecting the economy to contract 1% to 4% this year. The MAS undertook an unprecedented dual easing action earlier this week, reducing the slope of its currency band while also re-centering the band downward.

Unlike the SARS outbreak in 2003, which mainly affected the tourism and aviation sectors, “the implementation of widespread safe distancing measures means a lot of companies are impacted” this time, Teo said. “And thinking about how interconnected the supply chain is, we begin to appreciate the scale and magnitude of the impact.”

The resident unemployment rate, at 3.2% in the fourth quarter, is expected to rise and wage growth is likely to ease, the central bank said recently. Struggling companies can lower pay if they need to, with management leading by example, the National Wages Council said in a statement this week.

Teo acknowledged difficulties that companies in Singapore may face in hiring foreign workers given current global travel restrictions.

“Even if they have a need for the workers, they may not be able to bring onboard a good number, a good enough number anytime soon,” Teo said. “Wheareas in a normal year you might have more cancellations of work passes on a regular basis, I think companies are re-evaluating” and trying to keep workers for longer while they wait for the situation to stabilize and they have a better sense of what to expect.

Manpower measures

The Manpower Ministry has rolled out several measures to aid businesses outside of the general budget and stimulus packages. When Malaysia tightened travel restrictions from March 18 -- impacting the 300,000 or so Malaysian workers that contribute to Singapore’s economy -- the city state offered to subsidize accommodations for some laborers who provide essential services.

In February, the ministry loosened some hiring rules for Chinese workers to help facilitate labor transitions between firms in Singapore without requiring the worker to exit the country.

Singapore officials have emphasized that fiscal policy will take the lead to cushion the economy from the virus outbreak. The government has unveiled two special packages of stimulus worth around 11% of gross domestic product, and is reportedly ready to deploy a third package if the outbreak worsens.

©2020 Bloomberg L.P.