Understanding the Food Services Progressive Wage Model (PWM)

1. The Headlines: Sustained Wage Growth

The core of the new policy is a clear, three-year schedule of wage increases. The government has accepted recommendations from the Tripartite Cluster for Food Services Industry (TCF) to ensure that wages keep pace with the cost of living and median wage growth.

• Entry-Level Milestone: From July 1, 2026, the baseline monthly gross wage for entry-level food services workers will rise to S$2,220 (up from the current S$2,080).

• The Three-Year Roadmap: This isn't a one-off adjustment. Wages will continue to climb annually, reaching S$2,500 by 2028.

• Annual Increments: Most workers can expect a steady yearly increase of S$140, while supervisors with more complex responsibilities will see increments of S$145.

  
  

2. Who is Covered?

The PWM covers Singapore Citizens and Permanent Residents (PRs) across various job roles in two main categories:

• Category A (Quick-Service): Includes food/drink stall assistants, kitchen assistants, and cooks in fast-food outlets, food courts, and supermarkets.

• Category B (Full-Service): Includes waiters, kitchen assistants, cooks, and waiter supervisors in restaurants, caterers, and central kitchens.

  
  

Part-time workers aren't left behind either—their hourly rates will be pro-rated based on a 44-hour work week to ensure they receive fair compensation for their time.

3. More Than Just a Paycheck: Skills & Productivity

The "Progressive" in PWM refers to the link between higher wages and better skills. To qualify for these wage rungs, workers must meet mandatory training requirements.

• Broadened Training Pathways: The list of recognized qualifications has been expanded. In addition to WSQ modules, relevant certifications from Institutes of Higher Learning (IHLs) and private education institutions are now recognized.

• Upskilling Support: Workers can tap into the Workfare Skills Support (WSS) scheme, which provides training allowances—up to $10.50 per hour—to encourage them to "level up" while they work.

  
  

4. Supporting Businesses Through the Transition

The government recognizes that the F&B industry faces high operating costs and a manpower crunch. To help employers manage these rising costs, the Progressive Wage Credit Scheme (PWCS) has been extended for two more years. This scheme provides co-funding for wage increases, ensuring that businesses can stay sustainable while doing right by their employees.

Additionally, the implementation date has been shifted to July 1 annually to align with other sectors (like Retail and Cleaning), making it easier for firms with workers in multiple sectors to manage their administration.

5. The Importance of Compliance

As a business owner, it’s crucial to stay informed about these changes. Compliance with the PWM is not just about meeting legal requirements; it’s also about fostering a positive work environment. By adhering to these guidelines, you demonstrate a commitment to your employees' welfare. This can enhance your company's reputation and help attract top talent.

6. Preparing for the Changes

To prepare for these upcoming changes, consider the following steps:

• Review Your Current Payroll Structure: Assess your current wage structure and identify how the new PWM will impact your business.

• Budget for Increases: Factor in the wage increases in your financial planning to ensure sustainability.

• Communicate with Your Team: Keep your employees informed about the changes. Transparency helps build trust and morale.

  
  

7. Understanding the Role of LQS (Local Qualifying Salary)

While the Progressive Wage Model (PWM) sets sector-specific minimum wages, it works hand-in-hand with another key policy: the Local Qualifying Salary (LQS). Together, these frameworks ensure fair pay while regulating workforce composition in Singapore.

What is LQS?

The Local Qualifying Salary (LQS) is the minimum salary that a Singapore Citizen or Permanent Resident must earn for them to be counted as part of a company’s local workforce when calculating foreign worker quotas.

In simple terms, it determines how many foreign employees a business is allowed to hire, based on how many local employees they employ and how much they are paid.

Updated LQS Threshold (2026)

From 1 July 2026, the LQS will be raised to:

• S$1,800/month for full-time local employees

• S$10.50/hour for part-time employees

This increase ensures that wage standards continue to keep pace with overall wage growth in Singapore.

Why LQS Matters for Employers

Unlike PWM, which applies to selected industries (like F&B, retail, and cleaning), the LQS applies broadly to all companies that hire foreign workers.

To remain compliant, employers must:

• Pay at least PWM wages for workers in covered sectors

• Pay at least LQS to all other local employees not covered by PWM

Failure to meet these requirements can have serious consequences, including:

• Inability to apply for new work passes

• Difficulty renewing existing foreign worker permits

How LQS Affects Your Foreign Worker Quota

LQS plays a direct role in how your local headcount is calculated:

• ≥ LQS (e.g. $1,800) → counts as 1 local employee

• Between half LQS and full LQS (e.g. $900–$1,799) → counts as 0.5 employee

• Below half LQS → not counted at all 

This means underpaying local staff doesn’t just affect compliance — it reduces your ability to hire or retain foreign workers.

LQS vs PWM: Which Should Employers Follow?

A common question is whether companies should follow PWM or LQS.

The answer is straightforward:

• If your employee falls under a PWM sector → Follow the PWM wage (usually higher)

• If not → Follow the LQS minimum

In practice, employers must always comply with the higher of the two wage thresholds.

The Bigger Picture: A “Dual Wage Floor” System

Singapore does not implement a single nationwide minimum wage. Instead, it uses a layered wage system:

• PWM → Sets structured, skill-based wages for specific industries

• LQS → Ensures all local workers are paid meaningfully in firms employing foreign labour

Together, these policies act as a “dual wage floor”, balancing:

• Fair pay for workers

• Business sustainability

• Controlled reliance on foreign labour

The Bottom Line

This policy update is a balanced move aimed at narrowing the wage gap and professionalizing the food services industry. By investing in workers' skills and ensuring they earn a dignified wage, employers aren't just improving individual lives—they are building a more resilient and productive F&B sector for all Singaporeans to enjoy.

Are you an employer in the F&B sector? You can check the specific wage requirements for your job role on the MOM website.

Reach out to us if you need assistance with any HR or PWM advisory!