The Singapore Government is committed to managing the size of the foreign workforce, as part of the broader strategies to achieve productivity-driven economic growth, as well as to ensure that Singaporeans remain at the core of a diverse and globally competitive workforce. The aim is to avoid increasing dependence on foreign workers over the long term, by keeping the foreign share of the workforce at about one-third.
Over the last two years, the Singapore Ministry of Manpower (MOM) has introduced significant measures to moderate the inflow of Work Permit and S Pass holders1, including raising the foreign worker levy and tightening the levy tiers significantly, in phases, up to July 2013. The qualifying salaries for S Pass and Employment Pass (EP) were also raised to keep pace with rising salaries of the local workforce2.
The demand for EPs has increased rapidly since the economic recovery in 2010 and is likely to keep growing. We are therefore introducing measures which tighten the eligibility requirements for those entering lower and mid-level professional, managerial and executive jobs. The more stringent requirements will include better educational qualifications and higher qualifying salaries.
These moves will ensure that as salaries of locals rise as they gain in experience and progress in their careers, they will not be disadvantaged by EP holders coming in at lower wages.
Key Features of the EP Changes
The key features of the EP changes are:
- Q1 Pass: We will tighten the educational qualifications requirements so that only those from good quality institutions will be eligible. We will also move away from the single qualifying salary of $2,800 today. Instead, the applicant will have to earn a salary of at least $3,000, with the requirements depending on his qualifications and experience:
a) Young graduates from good institutions could qualify if they earn at least $3,000
b) Older applicants would have to command higher salaries to qualify, commensurate with the work experience and quality they are expected to bring
- P2 Pass: The qualifying salary will be raised from $4,000 to $4,500.
- P1 Pass: There will be no change in the qualifying salary for P1 Pass which remains at $8,000.
The new EP framework will retain the flexibility for MOM to consider, on a case-by-case basis, applicants with proven track records and exceptional skills-sets, but who may not have the qualifications required by the enhanced EP framework.
The enhanced EP framework will apply to all new EP applications from 1 January 2012. Thereafter, the qualifying EP salaries will be reviewed regularly to keep pace with the rising quality of the local workforce.
The changes amount to a significant shift in the EP framework. They aim to ensure that employers who need to augment their workforce hire foreigners with the right calibre, so that these employees add needed expertise and complement an increasingly qualified local workforce.
Transitional Measures for Existing EP holders
As stated above, all new EP applications will be subject to the enhanced EP framework from 1 January 2012. For existing EP holders, MOM will phase in the new requirements over the next 1-2 years (depending on when their current passes expire). This will give businesses time to make the necessary adjustments.
Existing EP holders whose passes expire:
- Before 1 January 2012: receive a one-time renewal of up to two years based on the pre-July 2011 EP criteria.
- Between 1 January 2012 and 30 June 2012 (both dates inclusive): receive a one-time renewal of up to one year on the existing EP criteria.
- On or after 1 July 2012: The new EP criteria shall apply.
Existing EP holders who change employers after 1 January 2012 will have their applications considered under the new EP criteria.
EP holders with dependants in Singapore by 1 January 2012 will retain these privileges as long as their passes remain valid and do not change employers.
Employers are encouraged to use the online Self-Assessment Tool on the MOM website to assess if their potential employees will meet the new eligibility criteria. The Self-Assessment Tool will be updated in view of the changes made to the EP framework. It will be ready by the fourth quarter of 2011.