For the first time in a decade, the number of foreigners holding work passes to work validly in Singapore fell for the first time from 175,400 in 2011 to 173,800 last December. The drop has been attributed to the restructuring and tightening of its foreign manpower policy by factoring in the experience and skills of foreign candidates as well as increasing the qualifying salary criteria.

While employers are still grappling with the new rules, the Acting Manpower Minister Mr Tan Chuan-Jin indicated on 24 April 2013 that more changes are on the way. These changes are likely to be in place in 2014.

  1. Foreign Manpower

Employment Pass

The current salary thresholds for P1, P2 and Q1 tiers of Employment Passes now stand at SGD 8000, SGD 4500 and SGD 3000 respectively. These are set to increase, based on the Acting Manpower Minister Mr Tan Chuan Jin’s answers given in an interview on 24 April 2013. Of primary concern is the low Q1 base criteria of SGD 3000 as it is deemed to have a depressing effect on the entry level wage for Singaporean professionals, managers and executives (PMEs).

S Pass

S-Pass is meant for mid-level skilled foreign workers, generally with technical qualifications and certificates. With effect from 1 July 2013, the base qualifying salary of SGD 2,000 has been increased to SGD 2,200 (approximately USD 1,775). Current S Pass holders who do not meet the higher qualifying salary and whose passes expire between 1 July 2013 and 31 December 2013 will receive a onetime renewal of up to one year. From 1 January 2014, all applications for S Pass renewals must meet the higher qualifying salary.

Salary threshold for full-time employment when hiring foreign workers

Employers are allowed to hire foreign workers (Work Permit and S Pass holders) based on the number of full-time workers they employ, up to the dependency ratio ceiling.

Effective July 2013, a local worker must be earning at least a monthly salary of SGD 1000 or USD 780 (up from the current SGD 850) to be deemed as working full-time. A part-timer must earn at least SGD 500 or USD 390 (up from the current SGD 450). Hence, every two local workers earning from SGD 500 to below SGD 1,000 will be counted as one local worker for the purpose of dependency ratio calculations. This is to prevent employers taking on local employees on a token salary just to allow the employers access to foreign workers.

  1. Raising local employment standards

The proposed changes of the Employment Act (Singapore’s main piece of labour legislation) likely to be introduced in 2014 can be broadly characterised as 3-fold:

  1. expand the scope of employees who benefit from the protection of the Act
  2. enhance benefits for employees
  3. effect flexibility for employers

More employees protected

Junior PMEs earning gross monthly salary of SGD 4,500 (USD 3513) or less and who have been employed with the company for at least one year will be entitled to more benefits such as sick leave benefits and protection against unfair dismissal. Junior PMEs required to work on public holidays would also be granted half-day off in lieu whether or not this is provided for in the employment contract. The other protection under Part IV of the Employment Act which sets out rules relating to rest days and hours of work will continue to be applicable only to low earning employees ie those employees whose gross monthly salary does not exceed SGD 2500.

Employers not liable for non-medical consultations/ treatments

In recognition of the rising popularity of cosmetic consultations and procedures/treatments and to prevent abuse of the statutory rights available in respect of sick leave, employers will not be required to grant sick leave or pay medical fees for employees who undergo consultations and procedures for cosmetic and aesthetic purposes.

Mandatory payslips and employment records

As a nod to raising employment standards, employers will be required to provide written itemised payslips and keep detailed employment records including employee salary. This is in tandem with the recent Personal Data Protection Act 2012 passed in Singapore which would require proper data collection, disclosure and use. These developments will be useful to prevent a salary dispute.

Authorised deductions from employee salaries

Currently, the authorised deductions from an employee’s salary may not exceed 50% of salary. With the changes, a 25% sub‐cap within the 50% total cap will be introduced for deductions such as accommodation, amenity and services to prevent excessive unreasonable deductions.

Retrenchment benefits

As employment nowadays is generally on shorter tenures, it will be mandatory to pay monetary compensation when laying off employees who have worked at least 2 years (instead of the current 3 years’ minimum length of service). In practice, retrenched employees are usually paid one month’s basic salary for every completed year of service.

Transfer of employees

In event of restructuring, the proposed changes will ensure enhanced protection for affected employees who are being transferred to another company by having the terms of their existing collective agreement protected for at least 18 months after the transfer takes place, even if the agreement is to expire earlier than the 18 months.

Job flexibility for work permit holders

Work Permit (WP) is another pass for low-skilled foreigners who wish to work in Singapore and who are from an approved source country/territory depending on the sector which the worker is going to be employed in).

On 1 July 2013, the Singapore Ministry of Manpower (MOM), in consultation with the National Trades Union Congress and Singapore National Employers Federation, issued Tripartite Guidelines on the Job Flexibility Scheme.

In the past, employers could only deploy WP holders to perform only the tasks they had been hired for, but with effect from 1 July 2013 WP holders can be deployed in other job functions in the same company. This job flexibility is intended to enhance productivity by encouraging employers to retain and upgrade the skills of these workers.

Concluding words

The refinement and tightening of Singapore manpower policies are significant. With the impending changes, it is therefore advisable that companies plan ahead and review their existing procedures, employment contracts and human resource allocation in the light of the intended