MOM’s Tightening of Work Pass Requirements - What does this mean for employers?

Oct 16 2020
PayrollServe
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Employers are required to hire reasonably and give fair consideration to Singaporeans based on merit.

In August 2020, the Ministry of Manpower (“MOM”) announced the tightening of work pass requirements. MOM has made changes to the Fair Consideration Framework (“FCF”) and updated the criteria for approving work passes for business growth, and support employment opportunities for Singaporeans.


Fair Consideration Framework (“FCF”)

The FCF came into force on 1 August 2014.  It requires employers to consider Singaporeans fairly for job opportunities, regardless of their age, gender, and ethnicity before hiring foreign professionals i.e. employment pass or S-Pass holders.

Companies found to practise discriminatory hiring will face prosecution and have their work pass privileges reduced. They are also advised to avoid over-concentration of employment pass and S-Pass employees.

Effective from 1 October 2020:

  • The FCF job advertising requirement will be extended to S-Pass applications
  • The FCF job advertising duration for employment pass and S-Pass applications will increase from 14 to 28 days

These changes help to promote greater awareness of vacancies for Singaporeans jobseekers looking for mid-skilled jobs, and sufficient time to respond to job openings. This also helps employers to evaluate their candidates more thoroughly.

 

Tightened salary requirements for EP

Effective from 1 September 2020, the salary requirement was raised to S$4,500 for all new Employment Pass (“EP”) applicants.

Please refer to the table below:

Minimum qualifying salary

Effective date

Current

New

New Applications

Renewals

EP (General)

S$3,900

S$4,500

Sep-01-2020

May-01-2021

EP (Financial Services)

S$4,500

Sep-01-2020

S$5,000

Dec-01-2020

S-Pass

S$2,400

S$2,500

Oct-01-2020

 

The qualifying salaries for older and more experienced candidates in their 40s will be raised correspondingly and will remain around double the minimum qualifying salary for youngest applicants.

 

Higher salary requirements in the financial services sector

The new salary criteria for EP holders will apply to the financial services sector as well, but the minimum qualifying salary for EP holders in the financial services sector will be raised to S$5000 for new applicants effective from 1 December 2020.

These changes complement the Monetary Authority of Singapore’s (“MAS”) effort to expand job opportunities and deepen local capabilities, especially in areas like cybersecurity, machine learning, and new growth sectors like green finance, pandemic risk insurance, and family offices.

Salary and eligibility requirements

To be approved by MOM, candidates must meet the following criteria:

  • The foreign professional must have a job offer in Singapore
  • He must be in a managerial, executive, or specialised position
  • He must earn a monthly fixed salary of at least S$4,500. The salary for older and more experienced candidates will be raised in tandem
  • Applicants must possess acceptable qualifications, usually a degree from a reputable university, professional qualifications, or specialised skills

The Self-Assessment Tool (“SAT”) is provided by MOM to check a candidate’s eligibility for employment pass. This tool provides a good indication of the candidate’s eligibility. However, exceptions may arise for senior management and candidates with specialised skill sets. MOM will evaluate these candidates on a case-by-case basis.

 

What do employers need to take note of?

MOM emphasises on the importance of hiring fairly, and that employers need to give due consideration to Singaporean job applicants regardless of their age, gender, and ethnicity.

In addition to the candidate’s qualifications, MOM will also evaluate the company that is applying for the EP, taking the following conditions into consideration:

  • The number of Singaporean employees in the company to the industry average
  • The company’s commitment to hire and develop Singaporean talents
  • The extent the hiring company has contributed to Singapore’s economy

Companies whose workforce profile suggests biasness against Singaporeans will be placed on a watchlist. This means that they will be subject to closer scrutiny on all their work pass applications.

In evaluating EP and S-Pass applications, MOM will take into consideration the numbers of Singaporean  professionals, managers, executives, and technicians (“PMET”s) employed by the company. Companies with a higher concentration of foreigners in their PMET workforce may also find their work pass applications subject to greater scrutiny. As such, employers that need to augment their PMETs workforce with additional EP or S-Pass applicants should continually build up and retain a strong Singaporean core. This also includes recruiting and training more Singaporeans PMETs.

Given the uncertain economic condition, these changes are implemented to encourage all employers to play their part in building up the Singaporean workforce. Employers need to look into their current workforce and determine if they are optimising the talents within their workplace based on the revised MOM qualifications. 



Penalties for non-compliance

Some employers only go through the motion of advertising on MyCareersFuture after pre-selecting a foreigner, and they do not actually review the applicants from the portal; while other employers post discriminatory job advertisements. These unfair practices breach the Tripartite Guidelines on Fair Employment Practices (“the Tripartite Guidelines”), and errant employers may be debarred from hiring foreign talent.

 

How we can support

The Government will continue to provide support for businesses to grow and strengthen the Singaporean core, complemented by EP holders with a global talent pool with specialised skill sets. Employers looking to hire foreign employees must take note of their obligations under the FCF criteria, and adhere to the Tripartite Guidelines.

The shifts in employment patterns and social norms has also significantly altered the nature of work for businesses. Employers can also consider outsourcing options to streamline in-house functions, save costs, and avoid penalties for non-compliance to the legislations.

PayrollServe is the Payroll and HR Administration Services division of Stone Forest. We are an MOM licensed employment agency that offers professional guidance throughout the entire employment pass application process, which includes renewal and cancellation of work passes, and appeal for rejected applications when required. We also support companies in completing the SAT to check the eligibility of S-Pass and employment pass, as well as posting relevant recruitment advertisements on Jobs Bank, in compliance with the FCF.

For assistance on work pass management, contact us.

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