SINGAPORE: The Ministry of Manpower (MOM) on Thursday (Aug 27) announced a slew of changes to its foreign workforce policy, including raising the minimum qualifying salary for Employment Passes and S Passes for the second time this year and introducing a higher salary requirement for Employment Pass holders in the financial services sector.
The ministry also announced that S Pass jobs will be subject to the Fair Consideration Framework advertising requirement from October, in a bid to promote greater awareness of vacancies in mid-skilled jobs among local job seekers.
From September, the minimum qualifying salary for new Employment Pass candidates will be raised by S$600 to S$4,500. This is the second such increase this year – the salary criteria for new Employment Pass holders was raised by S$300 to S$3,900 in May, and before that, also by S$300 to S$3,600 in Jan 2017.
The qualifying salaries for older and more experienced Employment Pass candidates in their 40s will also be raised, remaining at around double the minimum qualifying salary for the youngest applicants, said MOM in a press release.
Speaking to reporters on Thursday, Minister for Manpower Josephine Teo said that the changes were made to continue to encourage fair hiring, particularly in the current economic climate.
"It's important that Singapore remains an open and connected hub for international businesses, and we do value the contributions of foreign workforce because they do complement the local workforce in keeping Singapore an attractive host to investors from around the world," said Mrs Teo.
"Still, we have to understand these Employment Pass and S Pass changes in the right context. They are updates that help to keep them current with the prevailing conditions, and also make sure that the policies remain responsive."
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HIGHER SALARY REQUIREMENTS FOR FINANCIAL SERVICES SECTOR
For the first time, the Manpower Ministry is also setting higher qualifying salary requirements for a specific sector – namely, the financial services industry.
"Salaries in the financial services sector have been consistently higher than in other sectors. The sector also continues to hire and has been attracting strong interest from local jobseekers with good qualifications," said the Manpower Ministry.
As with other sectors, the new S$4,500 salary criteria for Employment Passes will take effect for the financial services industry in September.
However in December, the minimum qualifying salary for new Employment Pass applicants will be raised by another S$500 to S$5,000, said MOM.
Similarly, the qualifying salaries for older and more experienced Employment Pass candidates in the financial services sector will also be raised. Those in their 40s will need to meet about double the minimum qualifying salary for the youngest applicants.
"These changes will complement MAS' (Monetary Authority of Singapore) efforts to encourage and support financial institutions in developing a strong local pipeline of talent," said MOM.
For renewal Employment Pass applicants in all sectors – including financial services – these new salary criteria will be effective from May 1, 2021.
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S PASS SALARY REQUIREMENTS RAISED
Regular revisions to the salary criteria for Employment Passes and S Passes in recent years have slowed the growth of such holders in Singapore, even as the economy expanded, said MOM.
For Employment Pass holders, the growth has fallen from an average of 13,000 annually in the first half of the last decade to less than 3,000 annually in the second half, said MOM.
Similarly for S Pass holders, the increase has come down 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, said MOM.
From October, the minimum qualifying salary for new S Pass applicants will also be raised by S$100 to S$2,500, with qualifying salaries for older and more experienced S Pass candidates revised accordingly, said MOM. The changes will apply to renewal S Pass applicants from May 1, 2021.
There will be no further changes to levies and quotas, and the previously announced cuts in the S Pass sub-Dependency Ratio Ceiling – which sets out the maximum permitted ratio of foreign workers to the total workforce that a company is allowed to hire – for the services, construction, marine shipyard and process sectors will proceed as planned, said MOM.
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JOB ADVERTISING REQUIREMENTS EXTENDED
In another change, the job advertising requirements under the Fair Consideration Framework will be extended to S Pass applications submitted from October, announced MOM.
"This will promote greater awareness of vacancies in mid-skilled jobs among local jobseekers, and also require employers to make greater efforts to consider local candidates," it said.
The minimum job advertising duration for Employment Pass and S Pass applications will also be doubled to 28 days from October, "to give local jobseekers more time to respond to job openings and for employers to seriously evaluate their applications".
According to the Fair Consideration Framework, employers must first advertise jobs on MyCareersFuture.sg to make these positions known to local job seekers. Before submitting the applications, employers must have fairly considered all candidates. They should also be fair in their selection process and properly document the reasons for choosing a candidate over others, added the Manpower Ministry.
Noting that 90 employers had their work pass privileges suspended this year because of Fair Consideration Framework infringements, MOM said: "Employers are expected to take fair hiring seriously and give due consideration to local job applicants regardless of their age, gender and ethnicity.
"Discrimination against local job applications in favour of foreign applicants is especially unacceptable. Employers who practise discriminatory hiring in any form will have their work pass privileges cut back and may also face prosecution."
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In evaluating Employment Pass and S Pass applications, the Manpower Ministry takes into account whether the employer has "kept up support" of local professionals, managers, executives and technicians (PMETs) in their employment and "been responsive" to government efforts to help recruit and train more Singaporean PMETs.
The ministry will now give these considerations additional emphasis "given the uncertain economic times".
This will serve to "remind all employers to play their part in building up their Singaporean workforce", and "help sustain public support for a business-friendly work pass policy", said MOM in the release.
Employers whose PMET workforce profiles suggest a bias against locals will be put on a watchlist, said the Manpower Ministry.
Earlier in August, MOM announced that 47 employers had been placed on its watchlist of companies believed to have discriminatory hiring practices, without naming the companies.
Most of them are from financial and professional services sectors, while the remaining come from a variety of sectors including those in administrative and support services, manufacturing and education firms as well.
Employment Pass and S Pass applications from companies on the watchlist will be subject to greater scrutiny, said MOM.
"We will engage an expanded group of employers to review their hiring practices, before they are placed on the watchlist," said MOM.
"This expanded group will include firms whose Singaporean core has been weakening or whose EP and S Pass workforce are overly concentrated from a single source."
Responding to questions about perceptions that the new raised minimum qualifying salary requirements could cause companies to cut wages for Singaporeans to pay higher salaries to foreign hires, Mrs Teo urged employers "not to think of it in those ways".
"I would really urge the employers to consider the range of support the government has made available to them in order to be able to respond to this set of changes."