Manpower Minister Josephine Teo announced on Wednesday (26 August) that the there will be a hike in the minimum salary criteria for Employment Passes (EPs) and S Passes amid the weak labour market conditions caused by the COVID-19 pandemic.
“With COVID-19 and the economic disruption it has cause, there is now more slack in the labour market. We will therefore make further adjustments to our foreign workforce policies,” Ms Teo said.
She added, “Even as we stay open to the world to accelerate our recovery, the crisis makes it all the more important that employers give fair treatment to Singaporeans”.
“We will ensure that employers uphold both the letter and spirit of the Fair Consideration Framework. We will closely examine retrenchment exercises to ensure they are carried out fairly.”
As of now, individuals holding Employment Passes have to earn a minimum of S$3,900 a month, whereas those on S Passes must earn a minimum of S$2,400 a month. The salary requirement for older and more experienced workers are higher.
This announcement was made in the Ministry of Manpower’s (MOM) addendum to President Halimah Yacob’s speech at Monday’s opening of the 14th Parliament.
In her speech, Madam Halimah pointed out that job competition from work pass holders can become a divisive issue and have to be addressed. She also highlighted the need to strengthen social safety nets for the long term amid the pandemic.
Based on MOM’s addendum on Wednesday, Ms Teo noted that Singapore’s foreign workforce policies are made to support economic growth as well as to create good jobs for Singaporeans.
“There is regular calibration, to enable firms to access the manpower they need while ensuring a strong Singaporean core,” she said.
In today’s labour market, Ms Teo said that nearly six in 10 locals are hired under the professional, managerial, executive and technician (PMET) jobs. She added that for every EP holder, there are about seven locals employed in PMET roles.
In May this year, the EP salary threshold was raised to $3,900 for new applicants, from $3,600, and renewals will follow suit in May next year. Before that, it was last raised in 2017.
As for S Pass holders, the minimum salary was increased to $2,400 in January this year, from $2,300 last year and $2,200 in 2018. Before that, it was last raised in 2013.
Jobs for Singaporeans
Prior to the pandemic, the country had been preparing workers and employers for the future economy, however these efforts must now “shift to even higher gear”, the Manpower Minister said.
Highlighting all the different initiatives that the Government had put in place to help Singaporeans keep their jobs or find work, Ms Teo said that the National Jobs Council is leading an effort to create 100,000 jobs and skills opportunities via the SGUnited Jobs and Skills Package.
If that’s not all, MOM and its agencies are also working with employers to have vacancies available for job seekers who don’t mind acquiring new skills, and this is done by heavily subsidising training and the Jobs Growth Incentive, a wage subsidy programme for new Singaporean hires.
Ms Teo stated that if businesses are careful about hiring, then the Government will support them to conduct traineeships and attachments by co-funding the training allowance.
Additionally, more support will also be provided to employers who hire middle-aged and mature workers.
Raising the wage of low-wage workers still a priority
As to raising the wages of low-wage workers, Ms Teo said that it remains a key priority. She explained that full-time workers in industries where the Progressive Wage Model (PWM) has been fully implement have witnessed their gross monthly incomes go up by about 30 per cent in the last five years.
In fact, the PWM will be extended to more sectors in the future, but it will be done in a way that is “practical and ensures we preserve low levels of local unemployment”, Ms Teo said.
“This effort to raise wages at the lower end will require long-term commitment and new mindsets among employers, service buyers, and society at large,” the Manpower Minister said.
She added, “We may have to pay slightly more for services, so that lower-income workers are able to take on better jobs and earn higher wages”.
Ms Teo said that the Workfare and Silver Support schemes, which are cash supplement for low-wage workers and low-income senior Singaporeans, will be regularly reviewed, adding that the schemes were updated this year. Workfare payouts were increased and the criteria for the Silver Support scheme was also expanded.
“We will continue to look out for gaps in our social safety nets and enhance support in sustainable ways, and ensure every Singaporean who makes the effort gets a fair chance to bounce back from employment setbacks,” she said.
Commenting on the raise of salary criteria of EPs and S Passes, a Senior HR Consultant at HRmatters21, Martin, told TOC that it is going to be more expensive for employers to hire foreigners, and they will reduce other benefits to make up for this.
However, he noted that it will be easy to go around this by either reducing bonus or breaking up the Annual Wage Supplement (AWS) into 12 months.
“Easy to get around this. They (employers) will reduce other benefits to make-up for the higher monthly upfront. One way is to reduce the one-off bonus or break-up the AWS into 12 months, if the increment is marginal,” he said.