On Tuesday (3 March), Minister of Manpower Josephine Teo announced that in order for foreign professionals to qualify for an Employment Pass (EP), their minimum salary will be increased from S$3,600 to S$3,900 per month starting May this year.
“This increase is in line with improving wages of fresh graduates of local autonomous university,” said Mrs Teo while speaking at the debate of her ministry’s budget.
Additionally, she also noted that salary basis for experienced and older EP candidate will also be raised. For instance, those EP applicants in their 40s must be earning roughly double the new minimum qualifying salary of S$3,900.
“This is only fair, considering the skill sets he or she is expected to have. It helps to ensure a level playing field for experienced local mid-career PMETs (professionals, managers, executives and technicians),” Mrs Teo explained.
The last time the minimum EP-qualifying salary was changed was in 2017 when the wage was increased from S$3,300 to S$3,600 per month.
Mrs Teo said that the new salary requirement will only come into play for EP renewals starting 1 May 2021 in order “to moderate the impact on business”.
If that’s not all, she also pointed out that the “local qualifying salary”, meaning the minimum salary a local Singaporean worker should earn to allow a firm to meet its quota to employ foreigners on work permits and S Passes will be raised to S$1,400, up from S$1,300. This will take effect in July this year.
Last year, the minimum wage was increased from S$1,200, and has been constantly reviewed “to ensure that it keeps pace with rising local wages at the local end”, Mrs Teo noted.
She also went on to state that the majority of employers who take in foreigners are not affected by this as their local workers earn more than S$1,400. However, for those who are affected, they should receive some help from the extension of the Wage Credit Scheme.
Besides that, the Manpower Minister also acknowledged that she knows about companies that increase the salaries of EP holders solely to meet the minimum salary level while holding salaries of local workers, even if the locals are better employees.
To this, Mrs Teo said that these firms are risking their work-pass privileges, and erode the government’s effort to keep hold of local employees.
Fair practice in hiring locals
In order to ensure fair hiring practice among companies, the Ministry of Manpower (MOM) said that it will step up its measures.
The Fair Consideration Framework (FCF) was updated this January to ensure that Singaporean workers are not discriminated against in hiring by employers who favour foreign talent.
The Framework requires companies with over 25 employees to advertise PMET jobs that pay less than S$12,000 a month for at least 14 days before they apply to MOM for an Employment Pass (EP) for a foreigner.
In July 2018, the Framework was updated to cover firms with more than 10 employees and jobs that pay less than S$15,000 a month.
Companies that seem to favour hiring foreign over local talent will be placed on an MOM watchlist and have their EP applications for foreign workers scrutinised more closely.
The update in the Framework this January also requires employers to advertise job vacancies on national jobs portal MyCareersFuture.sg before submitting EP applications.
On Tuesday, Mrs Teo announced that the advertising requirement will include jobs that offer salary up to S$20,000 a month, an increase from the current S$15,000. This will be implemented from May this year.
“Positions that are more senior remain exempted as they are more likely to be market-sensitive,” Mrs Teo said.
Measures taken by other countries to curtail foreign labour
Many developed countries around the world have strict policies when it comes to hiring foreign talents.
One such example is the UK where the country’s decision to leave the European Union (EU) was highly motivated by the citizens’ desire to “take back control” of immigration, an article in Foreign Policy reported.
From the beginning of 2021, the UK’s Byzantine immigration system for non-EU migrant workers will also include those from the EU. This new points-based system would practically disallow almost all low-skilled migrants to obtain a work visa, except for those in the agriculture industry.
The UK government also noted that it will not be introducing a general low-skilled or temporary work route.
“From 1 January 2021, EU and non-EU citizens will be treated equally. We will reduce overall levels of migration and give top priority to those with the highest skills and the greatest talents: scientists, engineers, academics and other highly-skilled workers. We will replace free movement with the UK’s points-based system to cater for the most highly skilled workers, skilled workers, students and a range of other specialist work routes including routes for global leaders and innovators,” the UK government stated in its website.
Based on the new points-based system, in order for skilled workers to be granted a work visa, they must be able to speak fluent English and have a job offer at the required skill level from an approved UK sponsor.
Additionally, applicants are also required to secure a job with a minimum salary threshold of £25,600 (~S$45,500) per annum, with the salary requirements is lower for a few job categories with critical shortages, like nursing.
This points-based system is adopted from Australia, which also has stringent policies when it comes to hiring foreign workers.
In Australia, a foreign applicant needs to score a minimum of 60 points to get their visa granted, under its Skillselect system.
Based on this system, the applicants will be awarded points ranging from a variety of criteria like age, work experience, English language proficiency, educational qualifications and more.
As for the United States, they also have strict immigration policies in employing foreign labour as the country wants to only bring in immigrants with skills that are valuable to the US economy.
The employment-based visa comes in two-part – temporary visa classification and permanent immigration.
The temporary employment-based visa classifications allow employers to hire and petition for foreign nations for specific jobs and for a limited time only.
As for permanent immigration, it will be given to those who fall in certain categories like someone who poses “extraordinary ability” in limited industries like arts and science, members of professions holding advanced degrees, skilled workers with at least two years of training or experience, certain “special immigrants” like religious workers as well as individuals who will invest USD500, 000 to USD1 million in a job-creating enterprise that employs at least 10 full time US workers.
Since April last year, Japan’s amended its Immigration Control and Refugee Recognition Act to allow lower-skilled and semi-skilled foreign workers to be employed in the country.
Under the new Specified Skills (tokutei ginō) program, foreign workers with the status of Category I Specified Skilled Worker – which is limited to only 14 industries – will be entitled to live and work in Japan for a maximum of five years, without the presence of any family members.
In order for them to get the visa, the foreigners must sign an employment contract with a firm in one of the 14 industries and pass a language and basic-skills test.
Some of the 14 industries that are welcoming them are nursing, construction, agriculture, specific manufacturing industries, and food and hospitality services.
Additionally, after 5 years, these foreign workers under the Specified Skills category 1 can only stay longer in the country if they upgrade their status to category 2 residence status – which is meant for workers with more advanced skills.
They can do so if they pass an examination or meet other conditions. However, this upgrading possibility is only applied to two industries – construction and shipbuilding – and it starts only from the beginning of 2021 financial year.
In Germany, a new law was introduced on 1 March this year to bring in highly qualified foreigners from outside the EU into the country.
Called the Skilled Immigration Act, the law hopes to attract foreign workers in certain professions like elderly care, IT and engineering, as the country is has a strong demand for it.
Under the law, work permit will be granted to those who can secure a work contract in these professions.
As for those who can’t get an employment, they will be permitted to apply for a six-month job seekers’ visa, provided they fulfill the main requirement of having professional skills in industries that German businesses are finding hard to recruit qualified applicants.
Additionally, the Act also demands applicants to prove proficiency in the German language before being granted the work permit.
The country’s interior ministry stated that those foreign applicants are also required to acquire qualifications in Germany or posses qualifications equivalent to those in Germany.
Looking at this, many developed countries around the world have demanding and rigid policies to ensure only skilled workers and those who would fill demanding positions that are unwanted by locals, are brought into the country without cost to local talents and job opportunities.
As such, Singapore’s move to increase the minimum salary for foreign professions to be granted employment visa does not seem to address the issue of unfair employment, especially if there is no fundamental principle on justifying the employment of foreign labour as what the other developed countries do.
In fact, if you look at the other countries—besides the UK—none of them use wage level as a basis of whether the foreign worker is allowed to work in the country.