MOM announces tightening of work pass requirements: Increase in EP and S Pass minimum qualifying salary, enhancements to Fair Consideration Framework
On 27 August 2020, the Ministry of Manpower (“MOM”) announced the tightening of work pass requirements.
The Government’s criteria for approving work passes have been regularly updated to enable businesses to grow and also to support employment opportunities for locals. Following the adjustments announced in Budget 2020, the Government has been monitoring the impact of the Covid-19 pandemic on global and domestic economic conditions, to assess if further updates are necessary.
MOM will update the Employment Pass (“EP”) and S Pass criteria to complement the extension of the Jobs Support Scheme and the introduction of the Jobs Growth Incentive which were announced earlier. With these measures, the Government is providing a strong package of support to businesses to retain or expand local employment, as well as comprehensive measures to help local jobseekers secure meaningful work.
Tightened salary requirements for EP
EP applicants must meet qualifications and salary criteria. Regular revisions to the salary criteria in recent years have slowed the growth of EP holders considerably to less than 3,000 annually in the second half of the last decade.
From 1 September 2020, the salary requirement will be raised to S$4,500 for all new applicants. The qualifying salaries for older and more experienced EP candidates in their 40s will be raised correspondingly and will remain around double the minimum qualifying salary for the youngest applicants. For renewal applicants, these new salary criteria will come into effect from 1 May 2021.
Higher salary requirements in financial services sector
Salaries in the financial services sector have been consistently higher than in other sectors and the sector continues to hire and attract strong interest from local jobseekers with good qualifications.
The new salary criteria for EPs that take effect from 1 September 2020 will equally apply to the financial services sector. However, from 1 December 2020, the minimum qualifying salary for EPs in the financial services sector will be raised to S$5,000 for new applicants. The qualifying salaries for older and more experienced EP candidates in the financial services sector will also be raised, with those in their 40s needing to meet around double the minimum qualifying salary for the youngest applicants. For renewal applicants, these new salary criteria will come into effect from 1 May 2021.
These changes will complement MAS’ efforts to encourage and support financial institutions in developing a strong local pipeline of talent. The MAS has issued a press release stating that it supports the MOM move on the increase in the minimum qualifying salary for entry-level EP holders in the financial services sector.
S Pass salary requirements also raised, no changes to levies and quota
S Pass applicants must also meet qualifications and salary criteria and their employers must meet quota requirements and will incur levies. Through regular updates to the S Pass framework in recent years, the growth of S Pass holders has slowed to less than 6,000 annually in the second half of the last decade.
The S Pass minimum qualifying salary will be raised from S$2,400 to S$2,500, with qualifying salaries for older and more experienced S Pass candidates revised accordingly. The changes to S Pass qualifying salaries will apply to new applicants from 1 October 2020, and to renewal applicants from 1 May 2021.
There will be no further changes to levies and quotas in this round of adjustments. The previously announced reductions in the S Pass sub-Dependency Ratio Ceiling (sub-DRC) for the Services, Construction, Marine Shipyard and Process sectors will proceed as planned.
Additional considerations for EP and S Pass applications
Employers that need to augment their local professional, manager, executive and technician (“PMET”) workforce with additional EP or S Pass applicants should strive continuously to build up and retain a strong Singaporean core.
In evaluating EP and S Pass applications, whether the employer has (i) kept up support of local PMETs in their employment, and (ii) been responsive to government efforts to help them recruit and train more Singaporean PMETs, will be taken into account by MOM. Conversely, whether the employer has discriminated against qualified Singaporeans will also be taken into account by MOM. These considerations are given additional emphasis now, given the uncertain economic times, 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.
Fair Consideration Framework
MOM has emphasised that 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.
Before submitting EP applications, employers must have fairly considered all candidates. The Fair Consideration Framework (“FCF”) requires employers to first advertise jobs on MyCareersFuture.sg (MCF) to make these positions known to local jobseekers and employers should also be fair in their selection process and must properly document the reasons for choosing a candidate over others. MOM has regularly taken employers to task for poor practices like pre-selecting a foreign candidate and disregarding qualified local candidates, and will continue to do so.
During this year, 90 employers have had their work pass privileges suspended because of FCF infringements.
MOM will be taking two further steps:
- Extend the FCF job advertising requirement to S Pass applications: MOM will extend the FCF job advertising requirement to S Pass applications submitted from 1 October 2020 to promote greater awareness of vacancies in mid-skilled jobs among local jobseekers, and also to require employers to make greater efforts to consider local candidates.
- Minimum FCF job advertising duration for EP and S pass applications will be doubled to 28 days: To give local jobseekers more time to respond to job openings and for employers to seriously evaluate their applications, the minimum FCF job advertising duration for EP and S Pass applications will be doubled from 14 days to 28 days. This change will be implemented for new EP and S Pass applications from 1 October 2020.
Need to avoid overconcentration of EP and S Pass employees
Besides meeting FCF requirements, employers whose PMET workforce profiles suggest a bias against locals will be put on a Watchlist. This means that their EP and S Pass applications will be subject to greater scrutiny.
MOM has stated that since 2016, more than 1,200 employers have been scrutinised under the FCF. In all, 3,200 EP applications have been rejected or withheld by MOM, or withdrawn by employers. Over the same time period, employers on the FCF Watchlist have hired more than 4,800 Singaporean PMETs.
MOM will engage an expanded group of employers to review their hiring practices, before they are placed on the Watchlist. 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.
Conclusion
Singapore will remain an open and connected hub for international businesses. MOM encourages businesses to grow, expand their presence in Singapore and create good job opportunities for Singaporeans, and values the contributions of the foreign workforce as they complement the local workforce in keeping Singapore an attractive host to investors from around the world.
The updates to the EP and S Pass criteria are meant to keep them responsive and current. MOM will continue to provide businesses strong support for growing and strengthening the Singaporean core, complemented by a diverse foreign workforce.
Reference materials
The following reference materials are available on the MOM website www.mom.gov.sg or MAS website www.mas.gov.sg:
