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7 Key Changes to the Work Injury Compensation Act (WICA) That SMEs Need to Know: Effective From 1st April 2021
As part of the new Work Injury Compensation Act legislation, MOM has recently issued an additional requirement regarding the timeliness of data transfer from insurers to the MOM database for all new and / or renewal policies. Under this new requirement, data must be transmitted prior to the commencement date of the policy period.With effect from 1st April 2021, the salary threshold for workers doing non-manual work has increased from S$2,100 to S$2,600. This excludes any overtime pay, bonus payment etc.
For employees who are doing non-manual work but earning more than S$2,600, whilst this category is not compulsory under the Act - it is highly recommended for employers to include them - as part of a holistic workforce risk management, or risk 'out of pocket' compensation when such employee claim arises.
Please be aware, an employer's failure to provide WIC insurance is an offence and its breaches may result in enforcement by MOM.
All employers are required to adhere to the following:
1. They must give a committed order to insurers to buy or renew WIC insurance policies 21 days before commencement of policy
2. They must submit all the data required by the insurer 21 days before commencement of policy
3. Failure to comply with the above may result in employers being investigated by MOM and / or risk not having their worker's employment pass renewed, or even cancelled.
As a business owner, there are so many aspects that you need to be mindful of when running a business. Besides focusing on growing your business and seeking new opportunities, you also need to keep updated with the compliance requirements of your business operations. One such important requirement is when it comes to dealing with workplace injuries and employees’ compensation due to an accident.
In Singapore, the Government has certain laws governing claims and compensation for employees should an accident occur at the workplace. This promotes a responsible working environment for all employees and protects them from unfair compensation.
So, what is the Work Injury Compensation Act, and what does it cover? With the new changes taking effect from 1st September 2020, do you know what are the changes and what are the implications for your business and employees?
What is the Work Injury Compensation Act (WICA)?
An employer is liable for the compensation of their employees if they are injured in a work accident or develop a medical condition due to work. This is governed by the Work Injury Compensation Act (WICA) which aims to facilitate employees in making claims for work-related injuries or diseases to the Ministry of Manpower (MOM).
Under WICA, there is no need for employees to engage a lawyer to file a claim. Furthermore, an employee can claim compensation from his employer even if he is no longer working with the company, and regardless of who was at fault.
Who is covered by WICA?
All local and foreign employees under a contract of service with an employer will be covered by WICA, regardless of salary, role, age or nationality. This is with the exception of self-employed individuals, independent contractors, domestic workers, and uniformed personnels who are members of the Singapore Armed Forces, Singapore Police Force, Singapore Civil Defence Force, Central Narcotics Bureau and Singapore Prison Service.
As an employer, it is mandatory by law for you to purchase a Work Injury Compensation (WIC) Insurance for all local and foreign employees if they are doing:
- Manual work (regardless of salary level)
- Non-manual work, and are earning S$2,100 or less a month. This excludes any overtime pay, bonus payment, annual wage supplement, productivity incentive payment and any allowance.
Prior to 1st January 2020, the salary threshold for non-manual employees was S$1,600. Moving forward from 1st April 2021, the salary threshold will be increased to S$2,600.
For employees who are doing non-manual work but earning more than S$2,100, you have a choice to decide if you want to purchase a WIC Insurance for them.
Failure to provide WIC insurance is an offence and results in a fine of up to S$10,000 or jail of up to 12 months, or both.
What is an eligible claim under WICA?
WIC Insurance will pay for the claims that employees make under WICA, however, please take note that if you do not have a WIC insurance in place, you are still liable to make a compensation should a valid claim arise.
Employees are eligible to claim for compensation for an accident that arises out of and in the course of employment, even if they are no longer working for you or their work pass has been cancelled. They can also make an eligible claim if the accident happened while they are on an overseas assignment, or while on a flexi-work arrangement.
Other circumstances of an eligible claim includes contracting an occupational disease in the course of employment, or contracting a disease from exposure to biological or chemical agents at work.
Should there be an unfortunate event of death of an employee due to work, dependents of the employee can make a claim on his behalf.
Some scenarios whereby WICA does not cover are:
- Traffic accident that happened between home and workplace while not on company transport
- Traffic accident that happened while making a personal detour while travelling during work, regardless of the mode of transport
- Injured under the influence of alcohol or a prescription drug which was not prescribed by a doctor
- Self-inflicted injury or deliberately aggravate an existing injury
Key changes to WICA effective from 1st September 2020
- From 1st September 2020 onwards, project WIC insurance will be discontinued. This means that project WIC insurance policy that provides coverage to work injury sustained at a project site, or while doing work for a specific project will no longer be issued by insurance companies.
This is because having multiple coverage under both project policy and employer’s policy will cause delays and disputes with respect to who should compensate the injured employee or to reimburse the employer.
Instead, main contractors and developers should ensure that sub-contractors buy their own insurance to cover their employees.
- Prior to 1st September 2020, employees on light duties due to work injuries are not compensated under WICA. Now, the scope of compensation will be expanded to include employees on light duties due to work injury. As employees on light duties are still receiving salary, employers only need to compensate them up to their average monthly earnings if the salary received during periods of light duties is lower. This will cover the shortfall in earnings when the employee is on light duty.
Employees on outpatient or hospitalisation sick leave will continue to be compensated for their lost earnings.
- It is also now compulsory for employers to report any instance of medical leave or light duties that arise from work injuries, within 10 days after they first notice the work accident.
- To address the concern of inadequate care or overly conservative assessment by a particular doctor, MOM now allows for doctor-switching to assess employees’ injuries if they feel that the existing doctor is not providing adequate care. This is to ensure proper assessment of work injuries.
- Compensation will also be based on current incapacity assessment so as to expedite claim resolution, instead of waiting for the injury to be stabilised and final assessment from doctor.
For cases of fatal or serious injuries, employees will no longer need to file claim applications. Claims processing for these cases will commence once MOM or the insurer is notified of the accident.
- Compensation can be based on a multiple of basic monthly salary where there is no available evidence to compute the employee’s average monthly earnings.
- There will be a greater recourse for employers to recover compensation paid on the basis of fraud or error. Anyone found to provide false or misleading information to obtain or avoid compensation for claims under WICA will be liable for a maximum fine of S$15,000 and / or 12 months’ imprisonment.
It is the responsibility of employers to ensure that existing WIC insurance policies that commenced before 1st January 2021 comply with the current WICA (Chapter 354) requirements, and remain valid until expiry or 31st December 2021, whichever is earlier. For WIC insurance policies that commenced on or after 1st January 2021, employers need to ensure that their insurer has been designated by MOM.
Want to get a quote for your company’s WIC insurance policy? Let Smart-Towkay Find The Best Competitive Quote For You!
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Read also: What is Public Liability Insurance And Should Your Business Get It?
Read also: COVID-19: How to Reduce Your Company Insurance Costs During This Pandemic
Read also: Business Planning: What is Keyman Insurance and Why Do You Need It?
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