In the Budget 2022 announcement on 18 February, Finance Minister Lawrence Wong announced that the minimum qualifying salary will be raised by S$500 for Employment Pass and S Pass applicants from September this year.
Employment Pass (EP)
EP holders should be professionals, technical personnel and skilled workers in managerial, executive or specialised jobs who can contribute to the economy and sharpen the local workforce.
For new EP applicants, the minimum salary will be raised from the current S$4,500 to S$5,000. For the financial services sector, which has higher salary norms, this will be raised from the current S$5,000 to S$5,500.
The qualifying salaries for older EP applicants, which increase progressively with age, will also be raised in tandem. For renewal applications, these changes will apply from September 2023, to provide businesses sufficient time to adjust.
According to the Finance Minister, this move ensures that incoming EP holders are comparable in quality to the top one-third of the local PMET workforce (those with professional, managerial, executive and technical jobs).
Similar to the EP framework, Singapore will increase the qualifying salary for S Pass holders to achieve in stages. An S Pass is granted to mid-level skilled workers who have the relevant qualifications and work experience. Singapore will aim for the S Pass holders to be comparable in quality to the top one-third of local Associate Professionals and Technicians.
In the first step, Singapore will raise the minimum qualifying salary for new S Pass applicants from the current S$2,500 to S$3,000 in September this year. A higher minimum qualifying salary of $3,500 will be introduced for the financial services sector. The qualifying salaries for older S Pass holders will also be raised in tandem.
Subsequently, the minimum qualifying salary for new S Pass applicants will be raised in September 2023, and again in September 2025. The specific salary values will be announced closer to implementation date, based on the prevailing local wages then. Similar to EP, the changes will apply to renewal applications a year later, to give businesses sufficient time to adjust.
In addition, Singapore currently regulates the number of S Pass holders with sub-Dependency Ratio Ceilings and levies. To better manage the flow of S Pass holders, the government will progressively raise the Tier 1 levy from the current $330 to $650 by 2025. This will impact employers whose S Pass holders account for up to 10 per cent of their total workforce.
Work Permit Holders
Meanwhile, the work permit policies in the construction and process sectors will be adjusted, to spur greater productivity improvements and support more manpower-efficient solutions.
The Dependency Ratio Ceiling, which is the proportion of foreign workers a firm can employ, will be reduced from a ratio of 1:7 to 1:5. This will be implemented from January 2024 to give companies time to prepare for the changes.
The Minister for Manpower will elaborate further on the foreign worker policy changes at the COS.
Foreign Worker Policy Framework
Singapore has a comprehensive foreign worker policy framework in place to allow organisations to access a diverse pool of manpower.
In his Budget 2022 speech, the Finance Minister assured us that Singapore will continue to stay open and welcome talent from around the world amid rising global competition.
At the higher end of the workforce, where there are acute skill shortages, the city-state will continue to welcome professionals with the right abilities to work alongside Singaporeans.
We can help your business prepare for these new adjustments to the foreign worker policies and navigate through the ever-changing policies. Contact us today to learn more.