Singapore Increases Qualifying Salaries for Foreign Employees
On August 27, 2020, Singapore’s Ministry of Manpower (MoM) has increased the minimum qualifying salaries for foreign workers to receive the Employment Pass (EP) and S Pass work permits.
In addition, EP holders working in the financial services sector will need tomeet a wage threshold, the first time the ministry has set such a sector-specific qualifying salary.
The effective date of this new criterion for new applicants of EPs (general) will be September 1, 2020, and December 1, 2020, for EPs for the financial sector. The effective date of new S Pass applicants is October 1, 2020. Moreover, the effective date for renewals of all work passes will be May 1, 2021.
With the overall unemployment rate at 2.9 percent in July 2020 – the highest in a decade – these latest measures are aimed at pushing businesses to hire more Singaporeans during the economic downturn caused by the pandemic.
Increased salary requirements for Employment Pass
The EP is issued to expatriates employed as executives, managers, or skilled professionals. First-time candidates can obtain an EP for an initial two years, which can then be renewed for up to three years at a time.
The last time the MoM increased the qualifying salaries criteria for foreign employees was in May 2020, whereby applicants for EPs had to earn S$3,900 (US$2,867) – up from S$3,600 (US$2,646) previously.
From September 1, 2020, the new minimum salary requirement for EP applicants will be S$4,500 (US$3,308). For applicants that are renewing their EPs, this salary criteria will come into effect on May 1, 2021. Older and more experienced candidates (above the age of 40) will see their qualifying salaries raised correspondingly.
Salary requirements for the financial services sector
Foreign applicants in the financial services sector must now receive a qualifying salary of S$5,000 (US$3,678). Similarly, the qualifying salaries for older and experienced candidates will also be raised. This will come into effect September 1, 2020, for new applicants and from May 1, 2021, for renewals.
Increased salary requirements for S Pass
The S Pass is designed for mid-level skilled employees, and the qualifying salary requirements are less than that for EP applicants.
The government has also increased the minimum qualifying minimum requirements from S$2,400 (US$1,765) to S$2,500 (US$1,838). The qualifying salary will apply to new applicants from October 1, 2020 and for renewals from May 1, 2021.
Fair Consideration Framework
The Fair Consideration Framework (FCF) requires all employers in Singapore to promote fair employment practices and improve labor market transparency.
Under the FCF, employers must first advertise job positions on the MyCareersFuture.sg to make them known to local job seekers. The jobs advertised on this portal were previously mainly for executive and manager level positions.
From May 1, 2020, job positions with a monthly salary of up to S$20,000 (US$14,700) are now advertised on the site; previously, job positions with a monthly salary of S$15,000 (US$11,000) and above were not required to do so. Certain senior positions remain exempted, taking into account that these can be market sensitive.
In order to provide greater awareness for mid-skilled jobs, the government has extended the job advertisement requirements to S Pass applications from October 1. Further, the job advertising duration for both EP and S Pass applications will be doubled from 14 to 28 days.
Supporting local employees
Businesses should be aware that the MoM, when considering EP and S Pass applications, will take into account whether or not the business has discriminated against qualified Singaporeans. Additionally, the MoM will evaluate if the business has been responsive to help train Singaporean professionals, managers, executives, and technicians (PMETs) as part of the government’s latest strategy to reskill its workforce.
This article was first published by ASEAN Briefing, which is produced by Dezan Shira & Associates.
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