Thursday, 1 Oct 2020

Minimum salary for Employment Pass to rise to $4,500, from $3,900; even higher qualifying salary of $5,000 for financial services

SINGAPORE – From Sept 1, firms applying for new Employment Passes (EPs) for foreign professionals will need to pay them at least $4,500, up from $3,900 now.

The qualifying salaries for older and more experienced candidates in their 40s will also be raised so that they remain around double the minimum salary for the youngest applicants, said the Ministry of Manpower (MOM) on Thursday (Aug 27).

In addition, new EP holders in the financial services sector will need to be paid at least $5,000 from Dec 1. This is the first time the ministry has announced a sector-specific higher qualifying salary.

The new criteria will take effect from May 1 next year for renewals of EPs.

These are among key changes to foreign work pass policies the ministry is making to support employment opportunities for locals as the Covid-19 crisis weighs on the job market.

For mid-skilled foreigners on S Passes, the qualifying salary will also be raised from $2,400 to $2,500, from Oct 1 for new applicants and May 1 next year for renewal applicants. The salary criteria for older and more experienced S Pass holders will be raised accordingly.

There will be no changes to levies and quotas for S Passes for now. Previously announced reductions in the quotas for the services, construction, marine shipyard and process sectors will proceed.

EPs are not subject to a quota, which refers to the maximum proportion of foreigners on a certain work pass that a firm can employ.

Speaking to reporters in a video call on Thursday (Aug 27), Manpower Minister Josephine Teo said that although the most recent adjustments to foreign work pass policies were announced in the Budget just this year, there is much more slack in the job market now, with higher unemployment kicking in and more people working shorter hours and looking for an additional job.

“It has always been made known to employers that if they are in a position to consider candidates from different sources, then they must not favour foreign applicants over local applicants that are equally qualified, or equally suitable for the job.

“We also want to emphasise this point, once again, to businesses, that they must make efforts to build up and retain their Singaporean core. This is critical, particularly in a climate and a time like this,” she said.

She highlighted the government support for businesses which hire more locals. The Jobs Support Scheme of wage subsidies for local workers has been extended by up to seven months, and a new Jobs Growth Incentive also subsidises the wage bills of employers that can grow their local headcount over the next six months.

Mrs Teo also stressed that Singapore must still remain an open and connected hub for international businesses.

“We do value the contributions of our foreign workforce because they do complement the local workforce in keeping Singapore an attractive host to investors from around the world,” she said.

She had first announced on Wednesday that the salary criteria would be raised, as part of adjustments to foreign workforce policies in light of the slacker labour market conditions owing to Covid-19.

This is the second time this year that the qualifying salaries for both pass types will go up.

In May, the EP salary threshold was raised to $3,900 for new applicants, from $3,600, with renewals to have followed suit in May next year. Before that, it was last raised in 2017.

For S Pass holders, the minimum salary was increased to $2,400 in January, from $2,300 last year and $2,200 in 2018. Before that, it was last raised in 2013.

There were 193,700 EP holders and 200,000 S Pass holders here as of December last year.

MOM said in a statement on Thursday that the growth of EP and S Pass holders had slowed in recent years, even as the economy expanded.

For EP holders, growth slowed from an average of 13,000 a year in the first half of the last decade to less than 3,000 in the second half, it said. The growth in the number of S Pass holders slowed from an average of 17,500 annually in the first half of the last decade to less than 6,000 annually in the second half.

When evaluating applications for EPs and S Passes, MOM will now also place more emphasis on whether the firm has continued to support their local PMET staff, or whether it has discriminated against qualified Singaporeans.

This is in response to the uncertain economic times, to “help sustain public support for a business-friendly work pass policy”, said the ministry.

Mrs Teo also said that MOM will continue to investigate cases where employers falsely declare the salaries of foreign employees in order to meet the work pass salary criteria, based on tip-offs and its contact networks such as the Migrant Workers’ Centre. It can prosecute those found to have committed offences.

When asked whether the ministry has considered implementing a quota for EPs, she said that the ministry does not close off any policy options. But based on the desired employment outcomes, the aim is to help businesses to recover, and not to introduce major shocks to the current system.

“We shouldn’t go overboard, we should make sure they are meaningful adjustments that support local employment but not to the extent where it will impede a company’s ability to recover and grow within Singapore,” she said.

“Because we really do need the companies to expand opportunities. And so they must have access to the complement of skills and talent that they can find anywhere, put them together, base it out of Singapore and make a success of it.”

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