SINGAPORE: The qualifying salary for Employment Pass (EP) applications will be raised from S$3,300 to S$3,600 from the start of next year, according to the Ministry of Manpower (MOM) on Tuesday (Jul 26).
This change is part of the ministry's regular updating of the EP qualifying salary to keep pace with rising local wages, maintain the quality of the foreign workforce and to better complement the local workforce, it said in its press release.
The previous minimum EP qualifying salary update was in January 2014, from S$3,000 to S$3,300, it added.
"With effect from Jan 1, 2017, only new EP applicants who can command a monthly salary of S$3,600 or more, subject to meeting other criteria on qualifications and experience, will be considered," said MOM.
"Those with more years of experience are also required to command higher salaries commensurate with their work experience and skill sets, as per current practice."
It added that there will be time for businesses to make adjustments. Existing EP holders whose passes expire:
a) Before 1 January 2017: Will be able to renew, for a duration of up to three years, based on existing EP criteria
b) Between 1 January 2017 and 30 June 2017 (both dates inclusive): Will be able to renew, for a duration of one year, based on the existing EP criteria
c) 1 July 2017 onwards: Will have to meet the new criteria for renewal, for a duration of up to three years
Employers are encouraged to use the Self-Assessment Tool (SAT) on the MOM website to assess if their EP candidates will meet the new salary criteria. The SAT will be updated by November 2016, the ministry said.
"POSITIVE MOVE": NTUC'S PATRICK TAY
Mr Patrick Tay, Assistant Secretary-General of the National Trades Union Congress (NTUC), called the change a “positive move” to keep up with the rising median wages of PMEs (professionals, managers and executives) and to maintain the quality of the foreign workforce.
“This, together with the series of other measures such as the FCF (Fair Consideration Framework), 'Triple Weak' Scrutiny, Jobs Bank and also tightening/scrutiny of conditions/criteria for EP will help level the playing field for our local PMEs and also build a stronger Singaporean core,” he wrote in a Facebook post on Tuesday.
At the same time, MOM should watch out for employers who use “creative means” to artificially increase the wages of foreign PMEs to meet this new criteria, he said, adding that the “bottomline is that local PMEs should be better off and not worse off”.
SMALL AND MEDIUM ENTERPRISES MAY FACE GREATER IMPACT: ASME
The Association of Small and Medium Enterprises (ASME) said that the move could have a greater impact on SMEs.
"Multinational companies have greater bandwidth and are less sensitive to increase in wages," said Mr Eric Tan, an ASME Council Member. "Whereas for local (businesses), it can have a very serious impact, especially with that fact that now, economic growth is only less than two per cent. With this increase - it's about eight per cent - that's a big blow."
He added that the rise in the qualifying salary will have a "big impact" on productivity, and that businesses will take about three to four years to adjust to the changes.