Overseas travel for leisure continues to be out of the question for many Singaporeans.
There has been some talk of international travel gradually resuming, but it has mostly been limited to "essential travel", such as specific kinds of business trips.
The popular sentiment among Singaporeans has been that we deserve more leave:
But globetrotters among us, who typically spend most of their leave days and long weekends holidaying abroad, would probably find themselves with an unprecedented surplus, as the last quarter of the year approaches.
What happens to unused annual leave?
There are three common outcomes for those with unused annual leave. It may be:
- Converted to cash
- Carried forward to the next year
- Forfeited
While some may be happier to have cash in hand, others might be keen to have their leave carried forward, especially if it means being able to go on longer trips when the borders start to open.
But one thing is for sure — almost no one would happily allow their hard-earned annual leave to simply be forfeited.
How do I avoid forfeiting my leave?
If you're the type to hoard leave till the end of the year, here are a few ways to make sure it doesn't simply go down the drain.
1. Take your leave while you still can
Of course, the simplest way to avoid having unused leave end up being forfeited is to use it before it expires.
While you can't head overseas right now, it is a great time to visit local attractions, which are beginning to reopen as Phase Two continues — taking all the appropriate precautions, of course.
Many hotels are also rolling out attractive staycation deals.
Deputy Prime Minister and Finance Minister Heng Swee Keat also announced recently on Aug.17 that $320 million has been set aside for tourism credits, known as "SingaporeRediscovers Vouchers", to explore local attractions.
2. Check whether (and how) it can be converted to cash
Leave converted into cash (also known as leave encashment) is usually prorated based on your salary.
As converting leave to cash may or may not be explicitly spelled out in your employment contract, it can be helpful to check in with your HR department or boss on whether it can be done.
If so, there are some further questions that you may want to ask.
What rate should be used?
If you have so much unused leave that it needs to be converted to cash, there may also be leave from the previous year carried forward to the current year.
Therefore, a question that could arise is: should the previous year's leave based on your salary in the previous year, or your current salary?
A community discussion page on the HRSingapore website suggests that the common practice is to pay employees based on their current salary, rather than the previous year's salary.
However, it should be noted that this is not governed by any written law, and can vary from employer to employer.
Will the additional pay be subject to CPF rules?
According to FAQs on the CPF website, additional payment received from encashment of leave is indeed subject to CPF contributions.
This means that you will need to make the usual contribution to your CPF out of the additional payment, while your employer will need to top up your CPF based on the usual rate as well.
This is because CPF treats the additional payment as an increase in your wages.
3. Make sure that it can be carried forward to 2021
If your plan is to save all your leave (and your holiday budget) for one epic getaway when travel becomes possible again, make sure that your leave can indeed be carried forward.
You can do so by checking whether your employment contract provides for this.
Certain types of workers are legally guaranteed that their annual leave will be carried forward, for instance...
Workers under Part IV of the Employment Act
This would be those who come under Part IV of the Employment Act, namely, a workman (someone who performs manual labour) earning up to $4,500 a month, or non-workman earning up to $2,600 a month.
For such workers, under the Employment Act, employers must allow workers to carry forward unused annual leave from a given year, into the next 12 months.
If they fail to do so, they may be committing an offence and could be liable to penalties such as fines, and even imprisonment, for repeat offenders.
Workers in this category should note that some days of unused leave may end up forfeited, however.
This may happen in a case where, for example, your leave from the previous year is still not utilised.
At the end of 2020, any leave carried forward from 2019 would automatically expire, and there is no requirement for your employer to let it be carried to 2021, even though your leave from 2020 must be carried forward.
Leave could also be forfeited if your employer has granted you more leave days than required by law, as they are only required to carry forward the number of leave days which are provided for under the Employment Act.
The Ministry of Manpower (MOM) website states that, in such a case, "you should check your employment contract on how such leave should be treated".
For example, a worker in their first year of service is only legally entitled to seven days of annual leave.
Should the employer grant them any extra days of leave beyond the minimum of seven, those days do not have to be carried forward by law.
Stuff to check out when you're on leave
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Mothership Explains is a series where we dig deep into the important, interesting, and confusing going-ons in our world and try to, well, explain them.
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Top Photo via Changi Airport/FB.