Singapore: Compliance checks - employment passes

The Singapore government has recently raised the salary threshold for Employment Passes. Companies have been given a lead time to comply; however employers should take steps now to ensure that it is able to meet the new threshold, as well as existing application requirements, ahead of the effective date of the change.

New salary threshold

The existing salary threshold for Employment Passes (EPs) of SGD3,300 is set to be raised to SGD3,600, following a recent announcement from the Ministry of Manpower (MOM). This change is due to take effect from 1 January 2017.

Existing EPs can continue to be renewed for up to three years based on the current salary threshold of SGD3,300 before 1 January 2017. From 1 January 2017 and before 1 July 2017, companies can renew existing EPs for one year based on the current salary threshold. However, from 1 July 2017, all renewals will be based on the new salary threshold of SGD3,600; if this is met, the EP can be renewed for up to three years.

Existing requirements

The salary threshold is however not the only requirement in obtaining an EP. Companies applying for EPs will still be expected to comply with the following:

• The grant of an EP is still conditional upon the applicant having acceptable qualifications and the necessary experience for the role. In particular, applicants with more experience are also still required to command higher salaries commensurate with their work experience and skill sets.
• Unless a company is exempted from doing so, it will need to advertise the role on Singapore's national Jobs Bank before it is able to submit an application for an EP, in line with Fair Consideration Framework requirements.
• The Singapore government has also recently announced that it will be adopting a stricter approach in assessing whether EPs should be granted to companies in the absence of a "Singaporean Core". Companies are now expected to meet additional company-related criteria in relation to the development of this "Singaporean Core" before they are able to apply for or renew EPs.

What this means for employers

The new EP salary threshold is the latest measure implemented by the Singapore government in its tightening of the rules around hiring foreigners in Singapore. Companies will need to be aware of the overall aim of ensuring that local employees are given fair consideration, and ensure that they are able to meet not just the new salary threshold for EPs, but other criteria relating to the employment of foreigners in Singapore.

To discuss how your business can take steps to comply, please contact Fatim Jumabhoy.