Singapore: Tightening of work pass requirements

The COVID-19 pandemic has severely affected business and employees all over the globe, including Singapore. In particular, while Singapore has seen a pick up in business activity in certain sectors, such recovery has remained uneven across the board. The job market also remains soft as certain economy sectors reduce their headcount, although there are shortages in other sectors for skilled manpower which are critical for recovery and growth.

Due to the generally weak job market and the unpredictable growth outlook, the Ministry of Manpower (MOM) announced certain measures in a statement released on 27 August 2020 as summarized below:

 

1. Salary requirements for Employment Passes (EPs) and S Passes to be tightened
   
   • EPs
     

     Currently, all EP applicants are required to meet certain eligibility criteria, including a minimum salary, in order to apply for an EP. This minimum qualifying salary was recently raised to SGD3,900 from 1 May 2020.

     From 1 September 2020, the minimum salary requirement will be further increased to SGD4,500 for all new applicants. For older and more experienced EP candidates in their 40's, the minimum qualifying salary will be increased correspondingly and will remain at an amount which is approximately twice the minimum qualifying salary for the youngest applicants.

     In particular, the MOM will impose higher minimum qualifying salaries requirements for EPs to be issued to those in the Financial Services Sector given that the sector continues to hire and attracts strong interest from locals with good qualifications.

     While the new minimum salary criteria for EPs will take effect from 1 September 2020 and will equally apply to the Financial Services sector, the minimum qualifying salary for EPs in the Financial Services sector will be increased further to SGD5,000 for new applicants from 1 December 2020 onwards. Similarly, the minimum qualifying salaries for EP applicants who are older and more experienced in the Financial Services sector will be increased, with the requirements for those in their 40’s to be approximately double the minimum qualifying salary for the youngest applicants.

     For existing EP holders who may need to renew their EPs subsequently (regardless of which Sector he/she belongs), the new minimum salary criteria set out above will come into effect from 1 May 2021.

   • S Passes
     

     Currently, all S Pass applicants must meet certain eligibility criteria, including a minimum salary, in order to apply for an S Pass. Their employers are also required to meet quota requirements and pay certain levies. The minimum qualifying salary for an S Pass was previously raised from SGD2,200 to SGD2,300 from 1 January 2019 and to SGD2,400 from 1 January 2020.

     From 1 October 2020, the minimum qualifying salary for an S Pass will be further increased to SGD2,500, and the minimum qualifying salaries for older and more experienced S Pass applicants will also be increased accordingly. For existing S Pass holders, this new salary criteria will come into effect from 1 May 2021.

     There will be no changes to the levies and quotas in this round of adjustments, save as announced previously.

2. Additional considerations for EP and S Pass Applications
   

   In evaluating EP and S Pass applications, the MOM will take into consideration whether the employer has:

   • kept up support of local professionals, managers, executives and technicians (PMETs) in their employment; and
   • been responsive to efforts by the Singapore government to help them recruit and train more Singaporean PMETs.

   The MOM will also consider whether the employer has discriminated against qualified Singaporeans in their hiring practices. While this has always been the Singapore government's policy, these factors will be given additional weight moving forward so as to build up the local Singaporean workforce given the uncertain economy outlook. The MOM also hopes that this will help to maintain the public's support for a business-friendly work pass policy.



3. Fair Consideration Framework (FCF)

Generally, the FCF sets out requirements for all employers in Singapore to consider the workforce in Singapore fairly for job opportunities. Employers should not discriminate on characteristics that are not related to the job, such as age, gender, nationality or race. All employers are expected to comply with the FCF, the Tripartite Guidelines on Fair Employment Practices and the FCF job advertising requirements. This is taken seriously by the MOM, and the MOM has suspended work pass privileges of 90 employers this year due to breaches of the FCF.

The MOM will be imposing two further changes to the FCF:

• Extension of FCF to S Pass Applications
  

  From 1 October 2020, the advertising requirements under the FCF will be extended to S Pass Applications.

• Increase in the minimum FCF Job Advertising Duration for EP and S Pass Applications to 28 Days
  

  From 1 October 2020, the minimum FCF job advertising duration for EP and S Pass applications will be doubled from 14 days to 28 days.

4. FCF Watchlist

In addition to the FCF obligations, employers whose workforce profiles indicate that there may have been potential discriminatory hiring practices or a bias against locals will be placed on the FCF Watchlist. In particular, the MOM had announced on 5 August 2020 that, in addition to the 1,200 employers which were earlier placed on the FCF Watchlist, another 47 employers had been placed on the FCF Watchlist.

The MOM has also identified 240 firms via data analytics for further investigation for possible pre-selection of foreigners or for not abiding by the spirit of the FCF job advertising requirement. These employers will have their employment pass applications closely scrutinised, and those who are recalcitrant or uncooperative will have their work pass privileges cut back.

Given the updates above, employers should examine their hiring practices and workforce profile closely. In particular, the FCF requirements including the advertising requirements and the minimum qualifying salaries should also be taken into consideration in workforce planning.

DLA Piper is restricted for regulatory reasons from practicing local law in Singapore, as are most international law firms. Where advice on Singapore law is required, we will work with a local firm to provide such advice while leveraging our own knowledge and experience as international counsel in international advisory and transactional work.