The Ministry of Manpower’s decision to increase salary requirements for Employment Pass and S Pass overlooks the possibility of “those in power” hiring migrant professionals, managers, executives and technicians (PMETs) from the same country of origin, said a local human resource (HR) professional.
Individuals holding Employment Passes are now required 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 bar will be higher for older, more experienced workers.
Senior consultant at HRmatters21 Martin Gabriel told TOC on Thursday (27 August) that foreign staff in higher positions may also “easily decide to pay them more or enlarge the job scope to justify a higher salary grade”.
He also noted that firms prefer to hire migrant employees due to low turnover rates.
“[W]hen they come, they are stuck here for good for two years because of the agent fees,” said Mr Gabriel.
When asked if such minimum salary criteria increases may reach a point where they will no longer be effective, Mr Gabriel noted that employers decide on salaries “based on the value of the job”.
Thus, when the Government mandates the minimum salary for EP, it is usually done with the objective that migrant employees holding the pass “must be of higher quality” and thus “command that pay-grade”.
“That’s their objective, but the government’s thinking is just one dimensional,” he said.
Responding on whether increasing the minimum threshold for EP and S Pass holders’ salaries will make a material difference to labour market conditions, Mr Gabriel remains sceptical.
Noting that it is, in practice, more expensive for firms to hire migrant employees, he said that firms will mitigate such costs by reducing other benefits for such staff members “to make up for the higher up-front salary”.
“One way is to reduce the one-off bonus or break-up the AWS [Annual Wage Supplement] into 12 months if the increment is marginal,” said Mr Gabriel.
Manpower Minister Josephine Teo’s announcement on Wednesday (26 August) on her ministry’s plans to increase the salary criteria for the two work passes garnered a multitude of disgruntled reactions among Singaporeans.
Many commenters called upon the Ministry of Manpower (MOM) to put in place stringent quota for the two passes, particularly EP, instead of simply raising the salary criteria.
They highlighted that multinational companies (MNCs), for example, may still not be deterred from hiring migrant professionals, managers, executives and technicians (PMETs) in place of their Singaporean counterparts.
Others also urged the Government to impose higher levies on firms that continue to hire migrant staff and heavier penalties against employers found flouting the work passes’ requirements by using false declarations.
Many commenters also proposed increasing the wages of local workers — or even introducing a minimum wage — and to instate more policies that will create more employment opportunities for Singaporeans.
One commenter argued that raising the minimum salary requirement “means forcing employers to think why they need to spend so much money” on FTs instead of local workers.
They added that companies are beginning to prefer hiring Singaporeans “for a more stable workforce” and will not “take the risk of faking documents or relying on yearly renewal of EPs”.
One commenter said that the new minimum salary requirements may push companies to hire Singaporeans over “foreign talents” as “it might no longer be worth the administrative time and effort” to hire the latter.
However, the absence of a Central Provident Fund (CPF) contribution requirement for FTs may still render the increased minimum salary requirement ineffective.
In a TOC interview by historian Thum Ping Tjin in July, Leong Sze Hian — financial advisor and People’s Voice Party Jalan Besar GRC candidate in the recent general election — similarly posited that firms lean towards hiring foreigners due to the absence of a CPF contribution requirement.
He argued that the CPF issue, however, is not the primary driving force behind companies opting to hire migrant staff over locals, but rather the low turnover rate.
“The foreign worker is typically on a two-year contract. You can torture the guy, break all the rules, [and] they cannot run to another employer,” said Mr Leong, adding that such workers are often bound by agent fees back home.
A local worker may leave or lodge a complaint to MOM more easily, he said.
Mr Leong said that government policies have contributed to the unequal playing field in the Singapore manpower landscape.
“I mean, look at your National Jobs Bank. There is no disclosure of how many of the jobs actually go to Singaporeans,” he said.