Minister for Manpower Josephine Teo said in Parliament on Thursday (4 June) that there is no rule requiring job seekers to declare their last-drawn salaries to employers, and employers cannot insist they do so.
Ms Teo’s statement was made in response to questions from Member of Parliament (MP) Saktiandi Supaat on how common it is for employers and recruiters to ask job seekers to declare their last-drawn salary or to share previous payslips.
Mr Saktiandi went on to ask how this practice might affect job applicants’ employability and salary packages, and whether it should be stopped.
In response, Ms Teo asserted that there is no rule stating that job seekers must declare their last-drawn salaries, adding that employers cannot force them to do so.
She went on to say that a “practical approach” should be taken on whether employers are allowed to ask for such information, suggesting that last-drawn salary is a “relevant input” that can help employers to gauge the candidate’s seniority or to make an appropriate job offer.
However, if employers choose to use last-drawn salary to screen job applicants, they risk losing out on good candidates who are prepared to adjust their salary expectations, especially in current times, said the Minister.
“It is similarly unwise for employers to overlook the longer track record of the applicant, and make an offer based solely on the last-drawn salary especially if the last-held position was an interim one,” Ms Teo remarked.
Additionally, if the candidate chooses to provide salary information to employers, it should be used carefully.
In response to Ms Teo’s statements, Mr Saktiandi indicated that fresh graduates might be wary of taking up jobs that pay below the median salary as they fear that their future salaries will always be pegged to it.
He asked if the Government could look into the issue ahead of a post-COVID 19 scenario, while citing the Paycheck Fairness Act passed by the US Congress in 2019 that addressed the conflict over suppressing a candidate’s salary in a job application.
“My concern is whether some of these salary payslip practices by employers will actually lead to further negative externalities in the future, thus exacerbating unemployment numbers,” noted Mr Saktiandi.
In response, Ms Teo cited her previous experience as a Human Resource (HR) Director as she pointed out that companies usually assess a candidate based on multiple factors when they make an offer, aside from their last-drawn salary.
She advised job seekers to “look for another employer” if the company only focus on the last-drawn salaries in determining their “worth to the organisation”.
“Don’t spend too much time and waste your energy with these kinds of employers who cannot see beyond one number,” Ms Teo asserted.
Last-drawn salary is necessary to gauge the job applicant’s salary, says HR Professional
However, Martin Gabriel, a Senior HR Consultant of HRmatters21, opposed the Minister’s statement.
Speaking to TOC, Mr Gabriel shared that last-drawn salary is necessary for employers to gauge a job applicant’s remuneration.
“I disagree. Companies ask for last-drawn salary information as a yardstick of value to an applicant’s previous job. This would then be used to gauge an applicant’s remuneration,” he remarked.
Mr Gabriel explained that employers would make an offer based on the applicant’s last-drawn salary.
Although there are no rules requiring job applicants to comply with requests to declare their last-drawn salaries to employers, he indicated that “it is certainly a commonly practised norm”.
“If your last company paid you S$10k per month, then I can estimate that your value and skillset should be worth S$10k per month, and therefore I won’t be too far off to paying you that amount,” he added.