MOM further tightens foreign worker regime to develop 'strong local core of skilled workers'

SINGAPORE — The Ministry of Manpower (MOM) has announced a slew of foreign workforce policy changes that aim to develop a "strong local core of skilled workers".

The ministry said the policy updates were made so that employers would consider Singaporeans fairly and ensure that job openings are not restricted to closed circles of friends. They were also aimed at maintaining the effectiveness of foreign workforce controls.

During a debate on MOM’s budget on Tuesday (March 3), Minister for Manpower Josephine Teo said that to date, about 1,000 firms have been scrutinised for suspected nationality bias in their hiring and MOM put about 600 firms on a watchlist last year.

"Our objective is not just to penalise errant employers. We want them to improve. This is why we reached out to another 350 employers whose workforce profiles give us cause for concern, so they (would) take steps to strengthen local hiring." she said.

To date, she said that a total of 3,000 Employment Pass applications have been rejected or withheld by MOM, or withdrawn by employers. Over the same period, firms under the Fair Consideration Framework have hired more than 4,400 Singaporean professionals, managers, executives or technicians (PMETs). 

Here is a summary of the policy changes announced on Tuesday:

MORE HIGHER PAYING JOBS TO BE ADVERTISED FOR SINGAPOREANS

What it is: Under the Fair Consideration Framework, employers are required to advertise job vacancies on Singapore jobs search portal MyCareersFuture.sg for at least 14 days, before submitting their Employment Pass applications to the MOM.

An Employment Pass is a work visa for a foreign employee who earns a fixed monthly salary of at least S$3,600, though this figure is set to rise from May 1.

Prior to Tuesday’s announcement, the MOM said employers have been required to advertise if they have at least 10 employees and the job position pays a fixed monthly salary of less than S$15,000.

At present, job positions that pay between S$15,000 and S$20,000 are exempted from this advertising requirement.

What’s new: Starting from May 1, the advertising requirement will be changed to include job positions that pay a fixed monthly salary of less than S$20,000.

No changes were made to the requirement for the minimum number of employees.

RAISING LOCAL SALARY THRESHOLD TO HIRE FOREIGNERS

What it is:  Under the current Local Qualifying Salary (LQS) threshold, a company’s quota for hiring either Work Permit holders, or S-Pass employees — who are defined as mid-skilled foreign employees who earn at least S$2,400 a month — is determined by the number of Singaporeans on a firm's payroll.

For instance, a Singaporean employee must earn at least S$1,300 before they can be counted towards a company’s foreign worker quota entitlement.

Alternatively, a company could also employ two Singaporeans who each earn at least half of S$1,300 a month to be counted as having hired one Singaporean for the purposes of the quota computation

What’s new: To reflect rising income levels, the MOM said that from July 1 onwards, the LQS threshold will be raised by S$100 — from S$1,300 to S$1,400.

The half-LQS threshold will correspondingly adjusted from S$650 to S$700.

“The LQS threshold is regularly updated to ensure that local workers are employed meaningfully, rather than being employed on token salaries to allow the employer access to foreign workers,” said the MOM.

The LQS threshold was previously updated in July last year.

INCREASING THE EMPLOYMENT PASS CRITERIA

What it is:  Right now, Employment Pass applicants must meet salary criteria that take reference from the salaries of Singaporeans with similar experience and seniority.

The current minimum qualifying salary for Employment Pass applicants is S$3,600 per month.

What’s new: From May 1, new Employment Pass applicants must command a monthly salary of S$3,900 or more for their applications to be approved.

The MOM said that the minimum qualifying salary was raised to be in line with the improving wages of fresh graduates of local autonomous universities.

As for older and more experienced Employment Pass candidates, their qualifying salaries will also be raised.

To illustrate, the MOM said an applicant in his early 40s will need to earn around double the new minimum qualifying salary of S$3,900.

“This is only fair, considering the skill sets that he or she is expected to have, and helps to ensure a level playing field for experienced local PMETs in their 40s and 50s.”

To moderate the impact this announcement will have on businesses, the MOM said the rules will apply only on May 1 next year for foreign workers who are renewing their Employment Pass.

CUTS IN SKILLED FOREIGN WORKER QUOTA

What it is: Deputy Prime Minister Heng Swee Keat announced changes to one category of skilled foreign workers in his Feb 18 Budget speech.

He said that the sub-dependency ratio ceiling (DRC) for S-Pass holders in the construction, marine shipyard and process sectors would be cut from the current 20 per cent to 18 per cent on Jan 1, 2021, and to 15 per cent on Jan 1, 2023.

What’s new: The MOM said on Tuesday that if firms still exceed the new S-Pass sub-DRC after either of the deadlines, the ministry will allow these firms to retain these workers until their pass expiry to “avoid disruption to existing operations”.

However, it added that these firms will not be allowed to hire new S-Pass holders or renew their existing S-Pass holders until they come within the new sub-DRC.

The MOM reiterated that it will support companies willing to transform and develop a pipeline of Singaporean workers.

To help companies achieve this goal, the Government will:

• Defray training costs if companies hire fresh polytechnic and Institute of Technical Education graduates through the SkillsFuture Work-Study Programme.

• Give salary support to firms if they tap on programmes under the SkillsFuture Mid-Career Support Package. Firms who recruit, train, and retain workers aged 40 and above through selected reskilling programmes will receive additional salary support over six months.

• Allow firms that need more help to transit into the new S-Pass sub-DRC to apply for transitional manpower support under the Lean Enterprise Development (LED) Scheme. 

In relation to the LED Scheme, MOM said that firms should submit a concrete transformation plan. “We will prioritise firms that step forward early,” the ministry added.